| Since the SMSF is there to provide income for | | | | Diversification investing across a wide range of |
| the members after their retirement a good | | | | asset classes is deemed to be a wise strategy |
| investment strategy must be implemented. As | | | | for investing SMSF funds. The trustee should |
| with all other aspects of the SMSF, there are | | | | make sure that all SMSF investment restrictions |
| many rules and regulations about the types of | | | | are adhered to in order for the fund to remain |
| investments allowed. This is to protect the | | | | compliant. If it does not, the trustee risks the |
| SMSF from losing funds due to risky investments | | | | penalty, which can be a heavy fine or |
| which would, or course, impact the retirement | | | | prosecution. He may be disqualified from his |
| income streams of members. Generally | | | | position. The ATO prefers investments to be |
| investment strategies must do one main thing and | | | | held in the names of all those who are members |
| that is to maximise returns for the members. In | | | | of the SMSF, or in the name of the company as |
| order to do this the trustee must consider the | | | | trustee, if your fund is a corporate one. In those |
| ages and needs of all the members. He should | | | | states where the law prevents you from holding |
| ensure that the fund can not only pay for the | | | | investments in the funds name, a caveat or |
| cost these investment strategies incur, but can | | | | instrument will need to be executed. |
| also pay out member benefits as they retire. | | | | |