Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Retirement

Superannuation to withstand market volatility

By Cameron Micallef · March 13 2020
Reading:
egg

Retirement

Superannuation to withstand market volatility

By Cameron Micallef
March 13 2020
Reading:
egg
Superannuation to withstand market volatility

Superannuation to withstand market volatility

author image
By Cameron Micallef · March 13 2020
Reading:
egg
Superannuation to withstand market volatility

Superannuation funds are well placed to ride out the current global instability despite mass falls in equity markets, according to an industry body.

With the United States S&P 500 having its biggest one-day fall since 1987 today and Australia’s ASX 200 officially hitting bear markets, some super members are worried as their balances fall.

However, Industry Super highlighted that superannuation is well diversed into multiple asset types, meaning members’ funds are able to ride out the COVID-19 virus, despite many of the financial implications being unknown.

Industry Super CEO Bernie Dean highlighted the importance that members do not panic or make rash decisions that will hurt their long-term futures.

“People avoid selling their house during a property market slump because they are worried about making a loss; the same principle should be applied to changing your super fund or investment option immediately after a market drop,” Mr Dean noted.

Advertisement
Advertisement

The superannuation group also noted how members could actually be worse off if they move their funds due to losses being locked in.

At the last major market decline, during the global financial crisis (GFC), savers who moved their money from an average balanced industry fund into cash were $4,000 worse off after three months, $13,800 after a year, $34,800 worse off after five years and after seven years would have lost a whopping $46,000 of potential retirement savings.

“A way to lose money in super after a downturn is to make changes that crystallise your losses,” Mr Dean said.

Mr Dean explained to members that it is important to look at the long-term gains and not focus on the short-term volatility that markets are incurring. 

“It is understandable that people are concerned about the impact the coronavirus is having on the economy and their super balance, but it is important to remember that super is a long-term game and the market recovers,” Mr Dean concluded.

nestegg has previously reported The Barefoot Investor’s response about superannuation and the coronavirus.

Superannuation to withstand market volatility
Superannuation to withstand market volatility
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Join the nestegg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Nest Egg.

Read more

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.