Market volatility - it's not as scary as you might think
At the time of a market downturn, it's understandable you may be worried about the value of your super or other investments you may hold. Whilst disruptions are undesirable, falls within financial markets are not uncommon.
It can be scary when you hear the markets have decreased, especially with significant events such as the Global Financial Crisis (GFC) and COVID-19, however, a downturn is not necessarily a bad thing. Yes, short-term impacts will be felt instantly but with history as our guide, we know markets do recover. With recovery comes the opportunity to access assets at a lower price – think about your super being able to buy more assets at a lower cost point. This contributes to growing your super over time. These ups and downs of the markets may not affect your day to day life, they will affect your super.
Bendigo SmartStart Super is managed by a team of highly experienced managers who continuously monitor these markets for you; making informed decisions to ensure your super is maximised over time. The team are highly trained to deal with market volatility and times of crisis, many having worked through the GFC. The team watch the markets to minimise the impact of downturns and take advantage of the upturns.
Below are some facts to keep in mind when thinking of your super in a volatile market:
- It’s important to put current market movements in the context of your long-term investment objectives.
- Your super is a long-term investment and generally can only be accessed when you retire. For many, this means there should be enough time to recover from short-term movements. If you are nearing retirement, it’s worth reviewing your investment strategy and possibly moving to something with less market risk.
- Generally, higher returns do come with higher risk. Ensure you understand how much risk you are comfortable with for your personal investment strategy.
Risk vs return
All investments carry risk – even investing in cash. Market conditions, inflation, changes to interest rates and economic downturns can all have an impact on your investment.
An investment strategy is what guides your investment decisions. It is based on your future income or capital needs, how long you want to invest for, and how much risk you can live with.
Asset classes explained
Asset classes refer to the different categories that investments with similar features can be grouped into. Becoming familiar with asset classes can help you to further understand what to expect from the various investment options available to you.
Sandhurst Trustees Limited ABN 16 004 030 737 AFSL 237906 (Sandhurst) is a wholly owned subsidiary of Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL 237879. Each of these companies receive remuneration on the issue of the product or service they provide. Sandhurst is the responsible entity and issuer of the managed funds available on this website, and is also the trustee and issuer of the Bendigo superannuation products. Investments in these products are not deposits with, guaranteed by, or liabilities of Bendigo and Adelaide Bank and are subject to normal investment risk, including possible delays in repayment and loss of income and capital invested. Before making an investment decision in relation to one of these products you should consider your situation and read the relevant Product Disclosure Statement available on this site.
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