The recent falls have effectively reversed the gains seen in
international share markets since the start of 2018, and those in Australian shares
since November last year. These falls come after a very strong 2017 where
markets delivered their best returns since 2003.
are a normal part of investing
Reacting and changing strategies because of the events of
the past, week, month or even year can sometimes be costly. Research shows that
some investors may lose money when they change investments in reaction to
short-term market movements.* Investors may lock in losses and also miss out on
the potential for higher returns by being out of the market when it recovers.
If you’re concerned about volatility and whether your
investment strategy is right for you, speaking to a financial adviser can help.
Find out more
Managing your super
for the long term
Investing across a range of different assets (like shares,
infrastructure, property, fixed interest and cash) helps us to manage market fluctuations
over the long term. We’ve been preparing the portfolio for this increase in volatility
by adjusting the allocation to these asset classes, and in December lowering
the exposure to shares in our PreMixed options.
Share markets have been performing very strongly in recent
years, and have been a major contributor to the strong returns in both the
super and retirement income options. As the economic cycle matures, share
markets can become more volatile as inflation and interest rates start to rise.
This can cause periods where investment returns aren’t as strong as they have
As long-term investors, we look beyond the daily news and
focus on investing in a mix of quality assets that can grow your savings over
time. The Balanced option has returned 10.20%pa for the five years and 6.80%pa
for the ten years to 31 March 2018. The Balanced option for retirement income
accounts returned 11.31%pa for the five years and 7.82%pa for the five years to
31 March 2018.
* Sources: Owen Scott, AustralianSuper: The Age of
Flawed Reasoning: The Rationally Ignorant, the Return Chasers and the Flight to
Safety, Empirics 2017
AustralianSuper. Investment returns of the Balanced option from 1 January 2010
to 31 December 2017. Investment returns are net of investment costs and taxes,
but do not include the impact of administration fees that are deducted from
member’s account balances.
returns are not guaranteed. Past performance is not a reliable indicator of