SMSF trustees are required to have an investment strategy in place. I have found it quite useful, important even to regularly review this. My administrator does this via a generic, totally useless process that is primarily about compliance. I try to undertake reviews in the spirit in which they are intended. I try to have clear goals, to be focussed and filter out the noise, to be continually learning, analysing, evaluating and re-evaluating; and finally to sleep at night.
So this morning, as a part of this process, I read the Morningstar article posted on Friday analysing banks globally and they came to the conclusion that 3 Australian banks still represent good value. They are ANZ, WBC and NAB. Unfortunately, they did not release the report, only an article that reads a bit like a press release. I am a bit bearish at the moment, especially on a Sunday morning so I did wonder why they are talking up Australian banks? Does this just reinforce their clients beliefs? So how much of my SMSF portfolio should be in banks?
As the price of bank stocks had steadily risen, they made up around 50% of my portfolio and I felt quite exposed so I sold all my CBA around September last year and around half of WBC late last year. However bank stocks still make up around 30% of my portfolio. I am interested in what others are thinking about banks stocks given the recent falls.
As background, I am drawing a pension and rely on franking credits. At 62 yrs of age, preservation of capital is important.
