Newspaper headlines are designed to grab your attention, and when the conversation turns to share markets it’s normal to think about your own super investments.
Despite the recent headlines regarding the Coronavirus (COVID-19), and the potential impact on the global economy, it’s important to remember that stock market fluctuations are a normal part of the investment cycle. With this in mind, it’s important to remember that market movements are typically short-term, and super is a long-term investment. Making immediate changes to your super now could affect your super later.
Reducing financial risk
Reports about the Coronavirus first made news in late January. Since then, the virus has spread internationally and has already impacted tourism and supplies. This has been reflected in global investment markets, with sharp drops over the past week. We are monitoring these events closely.
At Catholic Super, we put value in protecting members money. Our nine diversified options are specifically designed to reduce risk by investing in many different types of assets across a wide range of countries. This can help provide some buffer for your savings against short-term volatility.
The past year is a good example of how share portfolios and super options can bounce back. Financial markets – weakened by negative global sentiment over 2018 – staged a remarkable comeback, delivering strong growth for members. Our MySuper Balanced Option returned 13.6% over one year to January 31, 2020.
While it’s too early to measure the impact on the global economy, it’s likely that there will be reduced growth during the first half of 2020.
Industries such as tourism and education will feel the effect of reduced travel. Industries that rely on Chinese supply chains may also see slowed (and at times stopped) delivery. This can have knock-on effects.
For the moment, the markets remain volatile, and we expect this will continue for the short term.
Remember that super is about the long term. If you’re concerned about your current investment options a Catholic Super financial planner can help you structure your savings in a way that reflects your goals and risk tolerance. See below to learn more about our services, and how to book an appointment.