Market volatility explained
During periods of market downturn, it's understandable you may be concerned about the value of your super or other investments you may hold.
While disruptions can be unwelcome, falls within financial markets are not uncommon. But market volatility is not as scary as you might think.
What is market volatility?
When it comes to investing, the term volatility is used to refer to the changeable price range of a security. For example, if the price of a security is subject to sharp and unpredictable rises and falls, it is often considered to be higher in volatility.
Meanwhile, securities with a relatively stable price range are generally thought of as being lower in volatility.
Planning for volatility
It can be alarming when markets dip. Especially when downturns result from significant events like the Global Financial Crisis (GFC) or the COVID-19 pandemic. But it's important to remember that periods of volatility are normal.
That said, a downturn is not always bad news. Yes, a volatile market can increase your investment risk. But volatility can also present investment openings.
Markets usually recover from downturns. And during periods of recovery, investment opportunities arise. Investors can access assets at a lower price point.
As a result, well-managed investments (including super) can take advantage of volatility.
Managing your super
Whether you consider yourself an investing pro or apprentice, if you have super, that money is being invested to fund your retirement.
With this in mind, it’s important to put market movements into context. Your super is a long-term investment and generally, is only accessed when you retire. For many, this means there should be enough time to account for downturns and recover from them.
If you are nearing retirement, you can consider reviewing your investment strategy. Understanding your risk tolerance and what strategies will suit you at various stages of life can help to get the most out of your super.
Bendigo SmartStart Super
The team at Bendigo SmartStart Super commits to helping you maximise your super. The fund is managed by a team of highly experienced professionals, who continuously monitor markets and make informed decisions to help you grow your super.
For more helpful articles, visit the Education HUB.
Risk vs return
Investing can be a great way to grow your money and reach your financial goals. However, it’s important to understand that all investments carry a degree of risk. So, how can you balance risk vs return?
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.
Things you should know
Sandhurst Trustees Limited
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.
Sandhurst is the issuer of the commercial lending products and the provider of any traditional trustee services available on this website. The Bendigo Funeral Bond (“the Bond”) is an investment product issued by Australian Friendly Society Limited (“the Society”), ABN 29 087 648 851 AFSL 247028, with benefits provided by the Society’s Funeral Benefit Fund established under Schedule 1, Rule E of its constitution and administered by Sandhurst. The Travel Protection Plan is issued by AIA Australia Limited ABN 79 004 837 861 AFSL 230043. The Society is associated with the Bank and its related entities. Neither the Bank nor any of its related entities guarantee the repayment of capital invested or the investment performance of the Bond. Information is correct at the date of this document and is subject to change.
The content on this website has been jointly prepared by Sandhurst and Bendigo and Adelaide Bank and contains general advice only. Advice in relation to superannuation and managed investment schemes is provided by Sandhurst and advice in relation to life risk insurance is provided by Bendigo and Adelaide Bank. It is provided as general information and must not be relied upon as a substitute for financial planning, legal, tax or other professional advice. The information is given in good faith and has been derived from sources believed to be accurate at its issue date. Neither Sandhurst nor the Bendigo and Adelaide Bank give any warranty for the reliability or accuracy or accept any responsibility arising in any way, including by reason of negligence for errors or omissions for the information contained on this website. The information contained on this website is subject to change without notice. Neither Sandhurst nor the Bendigo and Adelaide Bank has an obligation to update, modify or amend this website or notify you in the event that a matter of opinion or projection stated changes or subsequently becomes inaccurate.
Neither Sandhurst nor Bendigo and Adelaide Bank is responsible for the content of any other site accessed via this site. That information is the responsibility of the site owner. Links to other sites are provided for convenience only and do not represent any endorsement by Sandhurst or the Bendigo and Adelaide Bank of the products offered by the site owner.