Market Volatility and Your Super
Investment markets have been volatile over recent times. Periods of volatility in investment markets are normal, markets rise and fall in the short term. However markets do recover, it just takes time. So the best thing for you to do may be to do nothing but ride out the current volatility.
Points to consider.
- Superannuation is a long-term investment. As such there should be time for your super balance to recover from short-term market downturns. It is time in the market that is important, not timing the market.
- When choosing an investment product typically higher risk investments are more volatile. They may offer higher returns, but they are also more likely to take a greater hit if the market drops. Make sure you are comfortable with the level of risk you are willing to take with your super.
- Make sure your investments are diversified across different assets classes which can help lower the volatility of your returns. By choosing to mix your exposure to growth and defensive asset classes, the fluctuations in your portfolio returns can be smoothed over time.
- Review your investments to make sure they align with your risk and return profile. Your investment strategy should consider all aspects of your unique situation and aspirations for the future. If there has been a change to your goals or personal circumstances, then you may need to review your investments.
For more information please read the article on investment risk and return in superannuation.
If you need further advice to help you plan for your financial future, you can always speak to a financial advisor.
