Investment markets in Australia and overseas have experienced significant volatility due to the impact of COVID-19, an event that no one could anticipate.
If your Super is invested in a high growth strategy or in a life stage fund and you are not looking to retire in the next few years, it is likely that your Super will be invested in Australian and International shares. If you have selected a more defensive strategy, your exposure to the the share market will be lower than a high growth strategy due to your portfolio having more cash and fixed interest which are defensive assets.
What does this mean for everyday Australians?
Super is a long term investment, so while investment markets have volatility currently due to COVID-19, typically they will recover in the long term. If you are approaching retirement or are retired, it is important to stay focused on your long term investment goals and consider all the options before making any decisions.
Over time the value of your Super can fluctuate due to market conditions. Reacting to short term market corrections may mean missing out on market improvements.
Most Super funds are invested in a broad range of companies in different industries, which helps to reduce risk in your Super investments.
Long Term Investing
Super is a long term, tax effective investment strategy. It is expected that there will be periods of volatility but over the long term markets will recover from short term corrections.
Stick to your Plan
Consider how much risk you are comfortable with taking in your Super and build this into your financial plan for your retirement. Regularly review your plan to make sure you are on track for your retirement goal.
By Ian Littler