Many AvSuper members have been watching stock markets fall since 30 June 2011 and given related events around the world, including the downgrade of the US triple-A credit rating and ongoing worries about European debt, there is quite reasonable concern about their  super investments.

It is important to remember that superannuation is a long term investment and short term falls are to be expected. Good advice perhaps but we acknowledge it can be very hard for some members to sit and watch their super nest egg decrease, especially as financial markets in Australia fall close to levels last seen at the height of the GFC in 2008.

While there may be things you can do, we caution against panicking or making hasty decisions without thought for the long term consequences of your actions.

In addition to the information below, you may find our last member bulletin a useful guide to recent investment performance, while our monthly investment update and the other investment information and fact sheets you’ll find on our website may be helpful for understanding what has been happening in the financial world, especially as it relates to your AvSuper investments. Of course, you can also contact us to discuss your concerns.

Thinking of taking action

We understand the often emotional urge to flee volatile markets and transfer your investment assets to cold, hard cash – but we strongly recommend you think about your options and their consequences before you take any action. You could end up realising your losses by ‘selling at the bottom’ and then miss out on any market increase that eventuates.

Particularly if you are retried or approaching retirement, now may be the time to talk to our Member Advice Manager to get some advice about choosing AvSuper investment options to best suit your investment needs and risk tolerance (free appointments with our Member Advice Manager are available to all members).

AvSuper’s returns for the 2010-11 financial year were amongst the top 10 funds in Australia so we are well positioned for the future, notwithstanding the current downturn.

Most importantly, remember that trying to time investment markets’ peaks and falls is very hard and very risky, especially in such turbulent markets as we are now seeing. Also, while cash investments do offer lower risk than most other investments, they are unlikely to give your super sufficient growth over the long term, so carefully consider your investment timeframe and long term needs before switching to cash when markets are falling, or have fallen dramatically.

Superannuation and financial markets

Remember: superannuation has performed extremely well over the long term. Super has considerable tax advantages and it can be hard to get back into if you leave the system.

Given that most Australians will spend 15 years or more in retirement, super is still a long term investment even if you are retired or nearing retirement. Over time, you will likely require some growth, and therefore some exposure to growth assets in your super, even while in retirement.

In the short term, the AvSuper Trustee considers that the current situation is not likely to be a repeat of the 2008-09 GFC and notes the corporate world is now in an even better position to deal with downturns than it was three years ago. In the past, we’ve seen that “scared” markets have provided the best opportunities for those who remain focussed on their medium to long term investment objectives.

What AvSuper is doing

The AvSuper Investment Committee is watching investment markets very closely, taking sound investment advice on the key issues and carefully considering the long term growth of your super as they monitor AvSuper’s investment portfolio. We will make any adjustments that may be prudent or appropriate to the circumstances to ensure your super savings are invested soundly with an eye to the long term, and try to take best advantage of the current economic climate.

As the financial situation develops over coming weeks, we will keep you informed. Meanwhile, you can look at the investment section of our website for updated returns, investment managers and related information at any time, or you can call us on 1800 805 088.

 

Michelle

Michelle Griffiths
CEO, AvSuper

Live Chat Support Software

Phone 1800 805 088 (Free call)
Email:
avsinfo@avsuper.com.au