Key takeouts in 10 seconds:
Markets go up and down: It’s normal. Your super will do the same.
Think long-term: Super is for retirement; short-term dips in balances are expected and part of a bigger picture.
Diversify investments: most of Rest’s investment options are diversified, being in different asset classes can help smooth super returns over time.
We can help: before making any decisions or changes to your super, reach out to a Rest Super Specialist.
When tensions between countries increase as we have seen recently in the Middle East, we know that it can be a worrying time. Many of you may also be watching your super balances towards the end of financial year and wondering what recent news may do to your balances.
When short-term news causes share markets to move quickly, it is important to remember that this volatility is normal market behaviour. Share markets go down, and share markets go up – it is to be expected. These fluctuations can be unsettling, but they’re a normal part of investment cycles.
The news from the Middle East is raising questions around the future cost of oil and higher petrol prices, which may not seem like good news. However, markets are also expecting interest rates to come down over time and this could be more positive. Even with short-term volatility challenges, history has shown us that after pullbacks, the US and Australian share markets do recover over time. Our Rest Investment experts are taking all this into consideration when investing on your behalf. It is a natural part of investing and why it’s important to remember that super is meant to be a long-term investment for your retirement.
Here are some essential points to remember:
- Keep perspective: Markets go up and down, and short-term drops don't necessarily indicate a long-term trend. Historical data shows that markets have bounced back from lows to achieve growth over longer periods of time.
- Focus on the future: Your super is geared towards the future – your retirement years. Immediate market ups and downs are less significant if you’re looking at a timeline that spans decades.
- The danger of trying to time the market: Trying to guess the best times to get in and out of the market is very challenging, even for professionals. By attempting to avoid losses by switching investment options during a market drop, there's a risk of missing out on the recoveries and gains when the market goes back up.
- Embrace diversification: Most of Rest’s investment options contain a mix of assets to balance out risks and returns. Different asset classes typically don't move in sync. This means when some are down, others may be up. This helps to smooth super returns over time.
What should I do next?
Before making any decisions about your super based on recent market movements, a better approach would be to consider your risk appetite, and how your current investment option/s fit within your broader financial goals and timeline. Making impulsive changes could derail your long-term strategy.
A good next step is review your investment options (which you can do on the Rest App, or by logging in to your Rest account online).
For more information on Rest’s investment options you can visit https://rest.com.au/investments/options.
I’m close to retirement – what additional support can you give me?
We suggest you reach out to us for help from our Rest Super Specialists – this comes at no additional cost. You can book in a call at https://rest.com.au/tools-advice/advice/advice-phone-form.
I’d like to know more about markets going up and down.
To learn more about market dynamics and how they relate to super balances, read this article on understanding why your super balance goes up and down. You can also check out some of our Super Tips articles below for more valuable information.
