Determine your destiny
The long term return that the aggregate of self managed super funds achieve is critical from the community viewpoint for those reasons expressed in the article ‘Why enabling Superannuation Funds to achieve higher rates of return is critical for the national interest’.
Whereas larger industry super funds might invest in a combination of shares, property, bonds and other standard type assets, and hopefully be well managed by competent professionals, the average self managed super fund is much smaller in size, so likely to invest in one class of asset, the most common preferences being either shares or property.
Those returns generated by the best super fund are likely to ensue from much time and effort being devoted by operative(s) who work hard to meticulously select the best prospects available in a given asset class so as to later afford themselves the most comfortable retirement possible.
SMSF operators who invest solely in shares, and who have not received formal training as to how to dissect and analyse the balance sheets and likely future earnings of publicly listed companies, could do worse than try to follow those strategies executed by the world’s most successful share investor Warren Buffett. Buffett has demonstrably achieved better returns over a long period than any investor in history, just as no other cricketer has even come close to attaining the batting average of the famous Australian batsman Don Bradman.
Buffett’s modus operandi can in part be gleaned from reading several books about him, being ‘ Buffettology’ and the ’ New Buffettology’ both written by his former daughter in law Mary Buffett and co-author David Clark, ‘ Buffett’ by Roger Lowenstein, and ‘Snowball’ by Alice Schroeder.
Buffett was a former investing disciple of Benjamin Graham, whose methodology was adopted and enhanced by Buffett. Graham’s book ’ The Intelligent Investor’ is recommended reading for serious share market investors who use fundamental analysis to reach their respective investing decisions. The content of this book is dry in nature, but readers who persist and grasp its teachings will hopefully be well rewarded.
No observation is proffered here regarding the use of ’ Technical Analysis’ to invest. Some operatives successfully use technical analysis to invest and trade. Buffett took an initial interest in this discipline, before abandoning its use and wholly focusing on fundamental analysis.