So_Cynical’s - AustSuper ASX300 ‘low cost averaging’ trading adventure.
I have recently opened an AustSuper account because i felt i didn't have enough money in super to justify opening a SMSF, even a cheapo DIY type SMSF provider like ESUPERFUND at $849 a year (with no insurance), was just to much to pay when i only have 51K in super...I felt that Aust Super with their ASX300 investment option was like having a half SMSF but with only about 30% of the DIY SMSF cost.
I'm very confident of my ability to ‘beat the market’ and the woeful returns achieved by the vast majority of investment managers working in the super industry as i have had some success following my low cost averaging strategy using my own money and simply plan to continue with that strategy inside my AustSuper account, the way AustSuper allows me to trade will mean i have a lower margin for error due to having to place orders for execution on a weekly basis and accept the average (Monday) price rather than my price.
The AustSuper site says “ Instructions to buy or sell stocks in the ASX 200 Shares option that are received by AustralianSuper by 1pm Friday, or by Sunday midnight if submitted via MemberOnline, will be implemented on the first trading day of the following week.” Hopefully what that means is that my order will get executed the next day, however AustSuper do seen to be a little slow when it comes to getting things done....time will tell.
I plan to use this thread to document my progress and hopefully inspire others with low super balances to consider their options and take charge of their super rather than just accept the crappy choices on offer from the bulk of the super industry...at the moment only AustralianSuper, CareSuper and Legalsuper offer members the ability to pick their own stocks from the top 200 listed company's, with AustSuper expanding the option to the ASX300 later this year.
I can invest up to 50% of my account balance in the AustSuper ASX 200/300 Australian Shares option, with funds to cover switches into the ASX 200 Shares option being debited from my account in accordance with the standard switching protocols, debited pro-rata across my investment choice allocation, also no single stock can make up more than 20% of my total account balance.
All the rules can be found in this link.
Starting investment choice allocation (ASX300 investment option funds get drawn from here pro-rata)
- High Growth 12%
- Balanced 12%
- Conservative Balanced 10%
- Australian Shares 10%
- Property 20%
- Australian Fixed Interest 8%
- Diversified Fixed Interest 28%
With the $25500 available i plan to buy 3 stocks investing approximately $7333 in each, leaving $3500 of available funds to add to the recycled funds made available after the first profit take...for the next 12 to 24 months i would expect to maintain an entry size of about $7330 with plans to raise the average entry size to 8K when funds permit, growing over time to 9K and so on.
What i have to work with and the Plan - May 2011
- Total account balance $51000
- Total available for ASX300 share option $25500
- Position size per trade $7333
- Buy low sell higher
- Profit take target 9% +
- Trade exits will be partial with profits left in with an equal amount of capital + 20%
- Building a dividend/distribution stream via recycling capital
Stock selection will be based on fundamentals and my own twisted take on contrarian and value investing with a little chart action to make things interesting...my objective is firstly to beat the total return of the other half of my account, however i would only genuinely be happy if i was able to double it, over the moon if i was able to triple it, i expect to be somewhere in between happy and over the moon.
All trades with average price paid will be posted as soon as i have confirmation of the trade going thru which is about as live as AustSuper will allow....what i post in this thread will be real trades with real money, same as i have posted in the many stock threads i have contributed to except this time the dollar amounts will be public.
I expect employer, personal and any Govt co-contributions will total somewhere between 5 and 6K annually (currently considering a small salary sacrifice that would boost this by 2.5K annually) ~ fees and charges (less insurance) including those triggered by my activity in the ASX300 investment option should total around $250 to $330 per year...i plan on retiring in 7 to 10 years and will need this fund to be worth at-least 180K by then for my plans to come to fruition...minimum 13% PA growth needed to retire in 10 years.