It can be difficult not to be unnerved with news headlines about a looming global meltdown and the dramatic slowdown in the Chinese share market. At times like this, it’s important to look at the bigger picture and to take the time to consider the context of the market volatility.
The tendency in times of any market instability can be to move investments into ‘safe’ assets such as cash. While this may be the right course of action for some, for most people a move to lower risk assets also means a lower return over the longer term. Moving to lower risk assets also means investors will ‘lock in’ losses to date and may miss substantial opportunities for growth as markets recover.
It can be difficult to stay focused, but bear in mind that market fluctuations are nothing new.
Here are a few important things to consider before making any changes to the way your super is invested:
A slowdown is inevitable
The correction in the Chinese market is not unexpected. The kind of growth the Chinese share market has experienced year on year is not sustainable over the longer term. The Chinese economy is moving away from a stage of rapid infrastructure growth into a slower, and potentially less volatile, consumption phase.
The overall outlook for global markets is positive
While there has been a significant drop in market forecasts for Chinese growth, the US economy remains in good shape and Europe is also showing signs of recovery.
Stay your course or risk lower returns in the long term
In the current low interest rate environment, investors must learn to either tolerate the fluctuations in investment markets for long-term gain or to accept the very low rates of return provided by cash investments. You need to weigh up which is more important to you – longer term returns or shorter term security. For most of us, our super has a long-term investment timeframe that allows it to smooth out market fluctuations and corrections over time.
Your investments are managed by experts
Mercy Super’s investment options are invested across a broad range of asset classes and markets depending on the option/s you have selected. Each investment option is carefully managed to ensure that Mercy Super members have the best possible chance of achieving their desired outcome. In the rare instances of prolonged market volatility, investment managers will take necessary action to meet their aim of getting the best return for members that the prevailing market conditions will allow.
Our in-house financial advisers can provide you with information and advice on our range of investment options. Our qualified advisers can provide you with unbiased advice based on your circumstances and in your best interests.
So, if you want to check that you’re invested in the right option/s to meet your retirement goals, you can call us on 07 3163 8880, send us an email at email@example.com or drop in for a chat. You can find us on the Ground Floor of the Kelly Building, Mater Health Services, Raymond Terrace, South Brisbane.