Written by Name, Title, Company
Hindsight is an amazing thing, so let’s use a little and reflect on the past 12 months.
At the end of March a year ago, we did not know that it marked the beginning of an unexpected and relatively speedy recovery in financial markets as measured by key indices.
At that time, there was a lot of uncertainty on both the health and financial fronts. We did not know what we were dealing with regarding the pandemic and our Federal government was about to embark upon a significant financial stimulus program, the outcome of which may have been uncertain at the time, but looking back lead to an amazing turn of fortune.
We also learnt of a whole new range of professions; finding out that we had Chief Medical Officers (CMOs) and epidemiologists. Commentators also exposed us to a new range of expressions and phrases to describe what was occurring as borders didn’t close but ‘slammed shut’, medical experts didn’t work in a methodical manner to identify COVID out breaks, but ‘scrambled’ to do so and of course COVID didn’t just arrive or happen, it ‘hit’.
Sometimes it’s important to look behind the headline, as their purpose maybe just to get your attention and not always to tell the full story. This too can apply to the headlines we are seeing about the recovery in financial market, where the headline is focusing on the return to the ‘highs of a year ago’, talking of the recovery in market indices.
It’s also important when reflecting on your own SMSF’s position to measure it against your own benchmark and as some may recall our SMSF Connect Investment series article in April 2020 called for us to take ‘Time to review, take stock and plan ahead’ and track that plan.
I’m not sure how many did undertake the steps we discussed last year and:
- Took stock to assess what shape your SMSF was in post-crash?
- Calculate how the cash flow of your SMSF may have been affected as a result?
- Built a stress tested plan for a ‘worst-case’ scenario
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