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Issue 12: Are alternative assets right for your SMSF?

June 2020

It’s hard to believe that this is the twelfth article in this series; even more so when we consider that when the first was written a year ago, we were in a very different investment environment.

With the change in fortunes for markets over recent months, some investors and SMSF trustees may find it somewhat contrarian that as we emerge from a significant health emergency that has most likely had a substantial negative impact on our economy, that we are seeing a resurgence in markets.

Some may even be concerned that this resurgence has happened too quickly and that we may yet see another downturn as the full economic impacts become apparent. There may even be consideration of returning to or staying on the sidelines in cash or looking for other investment opportunities other than traditional equities, fixed income and property.

Often considered as ‘safe haven’ investments, some may be drawn to ‘alternative investments’ such as precious metals like gold, international currencies, private equity or collectables, such as vintage cars or jewellery.

Apart from being ‘alternative’ by not falling into the classic asset classes of cash, fixed income, equities or property ‘alternative assets’ are expected to perform in an alternative fashion, that is, when classic asset classes fall in value, these may rise and provide a buffer to the movements in more volatile markets such as equities.

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Ian Irvine – Guest Contributor

Ian has been a keen investor for over 40 years and can draw on his experiences from both investing on his own behalf and also having worked in financial services for more than 30 years. Over this time, he has seen many changes that impact investors’ attitudes to in what and how they invest.

He started his career in what is now referred to as fast moving consumer goods (FMCG) or grocery, working for an Australian margarine manufacturer. In 1986, he was recruited to Westpac around the time of deregulation of the sector, where he spent 10 years before taking a role at AMP and then with ASX for 14 years up to the end of 2017. He continues to be involved with ASX; working on their educational programs.

In 1996, he and his wife established their own SMSF and again the experience and lessons learned regarding managing an SMSF over the years have provided him with many insights and ideas. He enjoys sharing these with others where these are helpful and always suggest that if an investor or SMSF trustee is unsure, that they should seek appropriate advice from a licenced professional.

Ian holds a B. Com (UNSW), and lives in Sydney and enjoys travelling to and meeting investors and SMSF trustee at the educational events with which he has involvement with from time to time.