What’s happening: Recent geopolitical escalation in the Middle East is causing financial market volatility and triggering investor caution across share markets.
Diversify investments: most of Rest’s investment options are diversified, being in different asset classes can help smooth super returns over time.
Think long-term: Super is for retirement; short-term dips are expected and part of a bigger picture.
We recognise recent developments in the Middle East may be distressing and unsettling. It’s natural to feel anxious or unsure during periods of uncertainty. We are here to support you with clear information about what’s happening and what it means for your super.
What has happened?
There has been a significant geopolitical escalation in the Middle East, which is causing financial market volatility - mainly through higher oil prices and cautious share markets. While unsettling, these types of events are not unusual, and well diversified super portfolios are built to manage them. Long-term retirement outcomes are generally driven by years of steady investment returns, not by short-lived market shocks.
What does this mean for your super?
Movements in super account balances are normal over time. This is because markets go up and down, and super balances typically reflect this. It’s understandable to feel concerned when headlines emphasise changing market conditions, but it’s important to remember:
1. Volatility is normal
Markets go up and down, and short-term market drops don't necessarily indicate a long-term trend. Markets often react quickly to global events, but these movements can reverse once more information becomes available.
2. Super funds are diversified
Most of Rest’s investment options are diversified and invest across many countries, industries and asset classes. This diversification can help cushion the impact of any single market-impacting event and can help smooth super returns over time.
3. Long-term focus matters most
While conflicts can create bumps, long-term retirement savings strategies are designed to withstand periods of uncertainty. 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.
4. Professional investment teams monitor events closely
Super funds continuously assess global risks. They adjust portfolios where needed to manage volatility and protect members’ long-term interests - without reacting emotionally to short-term market noise. 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.
How does Rest manage market volatility?
At Rest, we don’t try to guess what will happen in the markets day to day. Instead, we focus on building diverse portfolios designed to help you grow your retirement savings over the long-term.
But we also know that when big events happen, markets can sometimes overreact. During these times, our investment team — and the specialist managers we work with also keep a close eye out for good long-term opportunities.
This can mean buying strong, highquality investments at lower prices when markets are volatile. These opportunities don’t come along often, but when they do, they can help improve long-term returns for members.
We don’t try to predict the short-term. We stay focused on the long-term and the many economic and financial drivers of market returns and aim to use market ups and downs to our advantage when it makes sense.
What should I do next?
If the market feels unsettled, try not to make quick decisions about your super. 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.
Switching options or withdrawing money during a downturn can lock in a loss, meaning a temporary drop becomes permanent. It may also mean missing the recovery when markets bounce back. There can still be good reasons to switch — it’s just important to know the impacts first.
A good next step may be to review your investment options (which Rest members can do on the Rest App, or by logging in to your Rest account online). For help reviewing your options and making informed decisions Rest members can tap into our digital advice tools at no extra cost.
