9 April 2025
Investing successfully for retirement relies on a steady focus and not being distracted by the twists and turns inevitable on any long journey.
For AustralianSuper’s Head of Macro Research & Strategy, Amber Rabinov, the key to success is to remain focussed on your retirement goals. For most members with long-term investment horizons that can often mean staying the course when markets fluctuate.
As Amber explains: ‘Market downturns can be unsettling, but members can take comfort knowing that we invest for the long term and look for opportunities that market downturns can provide. This means we are actively investing in assets that we believe are mispriced relative to our cyclical and longer-term views, as well as in a mix of quality assets globally. This can help deliver strong long-term performance.’
Markets move in complex cycles and can be challenging to predict, especially if you’re not an investment expert. AustralianSuper’s deep team of experts rely on decades of experience and extensive research to help add value over the long-term.
Read more: THE BENEFITS OF ACTIVE MANAGEMENT
Changing markets can cause unease
When markets fall, it’s natural to feel uneasy. Many people feel the pain of an investment loss more than they enjoy the success of a gain. It can be hard to see at the time, but when markets fall it’s often a time of opportunity.
As well-known investor Warren Buffett says, ‘Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.’
AustralianSuper navigates market cycles for members
The chart below shows that over a period of 20 years, despite ups and downs in the market, members’ super invested in the Balanced option has grown. It can be tempting to sell out of the market and wait on the sidelines until it seems safe to dive back in, but many studies show that this strategy can deliver lower returns over the long run.
Growth of $100,000 from March 2005 to March 2025 in the Balanced option - Super
Long term performance of the Balanced option, starting with a $100,000 balance on 31 March 2005.
AustralianSuper investment returns are based on crediting rates, which are returns less investment fees and costs, transaction costs, the percentage-based administration fee deducted from returns from 1 April 2020 to 2 September 2022 and taxes. Returns don’t include all administration, insurance and other fees and costs that are deducted from account balances. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns.
The benefits of patience in times of uncertainty
History shows that the markets increase in value over the long term. By staying invested in a diversified portfolio your super has more opportunity to benefit from a future upturn when markets rebound. This means members who stay invested in a diversified portfolio often end up in a better position than those who keep changing investment options.
It’s important to consider your risk tolerance and your risk capacity. Risk tolerance is about how much you are comfortable losing over the short term. Risk capacity is how much risk and return you need over the long term to achieve your retirement goals.
Seeking financial advice
Balancing your risk appetite and personal financial goals is something which may change over the course of your working life and retirement. Consider speaking to a financial adviser1 to help you work through any questions and goals. An accredited financial adviser can help guide you when investment markets are bumpy so you can stay calm, focus on your retirement goals and make the right investment choices for you.
References:
- Personal financial product advice is provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd. Some personal advice may attract a fee, which would be outlined before any work is completed and is subject to your agreement. With your approval, the fee for advice relating to your AustralianSuper account may be deducted from your AustralianSuper account subject to eligibility criteria.
Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.
This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.
AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.