Opinion: SMSF Contributions: The Many Benefits of Timing Your Super Investments

One of the most important benefits of having a self-managed super fund; the ability to time your contributions and market entries. We all know the “buy low, sell high” analogy but rarely is it considered when it comes to traditional super fund investments. Using a self-managed super fund is a common way of increasing your ability to time your investments and contributions.

Contribution and investment dates matter

In most circumstances, compulsory employer super payments are paid to the employee’s super fund every quarter when the employer is required to, on preset dates. The employee’s do not get to chose when they receive their contribution nor do they get to choose when the super fund invests their money, which can be problematic!

- The Marketing Executive (mid-30s)

It's time in the market, not timing the market

Only in hindsight is it easy to pick when markets are high and when they are low, so it is best to have a systematic approach to investing in your super fund, rather than a discretionary one. Investors tend to be most optimistic when markets are going up and pessimistic when markets are going down, which is often incorrect.

- The Small Business Owner (early 60s)

SMSF trustees have more control

As a trustee of an SMSF and with keys to the fund’s bank account, you get the all-important choice to decide when those funds are invested in the market. Just like when you go shopping at the supermarket, you look for what’s on ‘sale’, the same process can be followed when deploying capital into the market from your SMSF.

- The Accountant (semi-retired)

If you can time the market, there is signifigant upside

Yes, there are some major assumptions to timing the market correctly, and it means you would have to have your ear to the ground at all times. The point is to illustrate the power of market timing and the flexibility a self-managed super fund can give you.

- The Thrill-seeker (late-20s)

Timing your exit is equally as important as your entry

The same principle applies in reverse, if you’re given the choice of when to exit your investments, then you can ‘play the market’ in your SMSF whereas it’s very difficult to buy and sell units in a typical super fund. Again, you don’t get the choice to decide when you sell or when you buy, and so you are at the mercy of the market fluctuations.

- The Marketing Executive (mid-30s)

Deciding when to sell is the hardest part of investing

Your decision on when to sell profitable investments is often what most investors struggle with the most. As the old saying goes ‘cut your losses early and let your profits run’ which for most investors, is the exact opposite of what they do. This is why it is best to have a systematic approach to selling investments and not base your decisions on discretionary or emotional analysis.

- The Small Business Owner (early 60s)

General Advice Warning

Ashwin Ramdas

Eventum Consulting

Ashwin is an accountant and educator based in Perth, Western Australia. He is passionate about helping family owned businesses and startups. He is one of the founders of SMSF Mate and you’ll regularly see him on our podcast!

Ashwin is a managing owner and director of Eventum Consulting, a multidisciplinary firm helping clients with finance, succession planning and their tax needs. He also served as a lecturer in taxation and small business at the Central Institute of Technology, and has worked as an accountant at a number of well-known tax specialists.

Ashwin studied a Diploma of Business Education and a Bachelor of Commerce in Financial Accounting, Managerial Accounting and Corporate Finance, both at Curtin University, WA.

Ashwin is passionate about technology, and sees it as an enabler for his clients to grow truly sustainable and profitable businesses.

You can find out more about Ashwin or connect with him on Linkedin here:

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Kind words from Aussies managing
their own self funded futures

  • SMSF Mate is a unique website because it has ideas about how to approach SMSFs, insurance and other financial topics that come straight from first hand experience. It's much more useful than what you find on all the other financial websites that just offer generic info that you could easily get on the ATO's website. It's also nice to know there's no financial incentive behind the information, it's legitimately there to help people understand self-managed super funds and how to get the most out of them, not to get an affiliate commission from a broker or other financial services provider. The investment product information is also incredibly useful, I've never seen this kind of functionality on any other website that let's you look at such a wide range of products, sort by what info is most interesting or important to you, and subscribe to updates for different funds and financial products all in one place. Definitely worth checking out if you own or are considering an SMSF!

    David G, Self-Employed, SMSF Owner
  • SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.

    Tim B, Business Owner, SMSF Trustee