While we can’t predict with any certainty how this situation will evolve, we are committed to keeping you to up to date with the latest news and likely impacts to the global economy and investment markets. The team are monitoring developments closely, and during this period of volatility our strategists are committed to producing frequent market updates in response to the ongoing crisis, keeping you informed on global markets and potential impacts.
We are also monitoring the Government response, particularly with regards to any financial relief measures that relate to your super savings. At this stage, those measures include allowing early access to super savings for eligible members, and a temporary reduction in the minimum drawdown amounts for pension members. Unfortunately, times like these also result in increased activity from scammers. We have some information on suspicious activity to remain alert for during this period.
New product developments – during this time we are still committed to developing new and innovative member services, and we’re keen to keep you across the details of the launch of our latest product innovation – GoalTracker.
Navigating periods of volatility
When it comes to determining what you should do during this period, the first step is to not panic, and for most people the next step is to do nothing. Every crisis and every market downturn comes to an end – there has never been an exception to this rule and it is highly likely the result will be just the same this time around.
While superannuation balances may appear to be negatively impacted in the short-term by the current market volatility, this is not necessarily a cause for concern – particularly if retirement is a fair way off into the future. Keep in mind that:
Share markets have performed very well in recent years. History has shown that short-term periods of negative returns and volatility are entirely expected and part of the normal journey for long term superannuation investments.
Members invested in diversified investment options are invested across a mix of assets which includes lower-risk assets like cash and bonds, which can help cushion the impact of any share market falls. It’s also worth repeating that superannuation is a long-term investment and markets have always recovered from crises of this nature and gone on to increase over time.
There can be significant risk involved when switching investment options during periods like this, as you can effectively ‘lock-in’ current negative returns, instead of riding out the wave of volatility and staying on course to your longer-term goals.
Members Nearing Retirement: if you’re nearing retirement, there are some extra things to consider. Depending on your timeframe to retirement, you may or may not be in a position to ride out this period of volatility and experience the recovery before it’s time to access your super savings. While maintaining some exposure to growth assets like shares is usually the right move in order to make your super last as long as possible into your retirement – a sharp drop in value just prior to retirement can do significant damage to your savings, and your plans. There is no single ‘right thing to do’ that applies to all members in all situations, so we suggest you consider getting help and advice from a professional investment adviser to work through the options for your particular circumstances.
We always caution against making investment decisions driven by emotions, like fear. Taking quick, reflex actions could result in you locking in the negative, point-in-time returns occurring currently due to this period of volatility. We’ve updated our toolkit to help you understand and navigate through this market volatility to remain focused on the long-term.