Myth: There is a lack of diversification in asset allocation choices
Lack of diversification in asset allocation choices of SMSF trustees has long been the cry of those critical of this sector – too heavily weighted to Australian shares and cash. Many have gone further and claimed that lack of diversification within asset classes is of equal concern. SMSF trustees loading up on bank stocks, for example, is a common misconception. Fuelling the property bubble in the residential home market has also been levelled at SMSF trustees (with the added claim more recently, of using excessive gearing to achieve this). Inexperience with investment markets, comparative lack of access to data compared to “professional investment experts” and susceptibility to scammers are all raised as problems with the SMSF sector.
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