How switching during the GFC cost some members thousands
During the global financial crisis share markets experienced an extended period of volatile returns. In an effort to avoid losses, many members switched to more conservative options like Cash.
While it took a while, share markets did eventually recover to their pre-GFC levels. Unfortunately, many members who switched options didn’t switch back to their original strategy. This had a double impact on their savings as they:
- locked in losses by selling when markets were down
- didn’t get back into the market and missed the strong recovery and returns that eventually followed
These examples are for hypothetical members, to illustrate the potential impact switching can have on long-term returns*.