Investing during market ups and down

Investing during market ups and down

Calm and steady wins the race

Before making short-term investment decisions: 

  • Consider the impact it could have on your future retirement balance as super is a long-term investment.
  • Most members are invested in a diversified (pre-mixed) investment option which are generally less volatile than any single asset, like the share market, for example.
  • Market downturns are generally temporary, and often bounce back stronger over time. Changing your investment strategy during a market downturn, could mean that you miss out on any future market recovery.
  • Before making any changes to your investment strategy, we recommend you speak with one of our experienced financial advisers, at no extra cost.

Market volatility and super

Super is a long-term investment. It isn’t cash sitting in the bank; it’s your retirement nest egg, carefully invested to produce returns but balanced against risk.

We understand you’ll need superannuation from retirement onwards. Since it’s likely to be one of the biggest financial assets you’ll own, it’s important to carefully consider any changes to your investment options.

There’s been significant impact on the Australian and international financial markets and the global economy, which have been driven by the COVID-19 (coronavirus) global pandemic. As a result, we understand that you may have concerns regarding your financial status and the impact this may have to your super and pension balances. 

Considerable downturns in global investment markets do happen with the most recent being the Global Financial Crisis (GFC) in 2008.   However, based on previous economic events, the worst thing people can do generally, is panic and switch to cash.

It is important to remember that investment markets and the economy move in cycles.  History shows that financial markets inevitably recover.   We’ve developed an investment strategy that seeks to balance both risk and return to maximise the long-term returns of your super and reduce the ups and downs of investments.

Our strategy works on the principle that certain investments (i.e. shares and property securities) generally experience greater unpredictability in the short term when compared to assets like bonds and cash. However, we believe that shares and property securities are more likely to achieve better returns over the long term than bonds and cash.

The chart below shows what would have happened to a sample person’s super following different decisions they might have made during the GFC. By switching their investments to a more conservative investment option like Cash, after the value had already gone down, they missed out on that value bouncing back upwards and thousands of dollars, which may never be recovered.

It demonstrates the value in maintaining a steady long-term investment focus.

Source: Frontier Advisors, SuperRatings. The analysis is based on the returns during and after the GFC and assumes an average member with a starting balance of $50,000 and SG contributions invested in the median balanced/cash fund.

Before changing investment options based on short-term market fluctuations, you might consider what the impact could be on your future retirement balance.  


Concerned about your balance going up and down?

Speak to one of our experienced advisers, at no extra cost to you.

Request a callback

Past performance is not a reliable indicator of future investment performance.

Advice about your super is included in your membership fees.

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