{"id":103094,"date":"2025-04-08T11:30:00","date_gmt":"2025-04-08T01:30:00","guid":{"rendered":"https:\/\/en.econostrum.info\/au\/?p=103094"},"modified":"2025-04-08T01:20:17","modified_gmt":"2025-04-07T15:20:17","slug":"stay-course-despite-superannuation-losses","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/au\/stay-course-despite-superannuation-losses\/","title":{"rendered":"Why You Should Stay the Course Despite Recent Superannuation Losses"},"content":{"rendered":"\n

On Monday, superannuation members across Australia experienced significant declines in their balances as the ASX 200 index dropped by more than 6%. <\/p>\n\n\n\n

The market’s volatility, driven by a mix of global factors including tariffs, led to a temporary setback in super funds. Despite the sharp fluctuations, experts advise against panic.<\/p>\n\n\n\n

According to News.au<\/a>, they emphasize that staying the course with a long-term investment strategy remains crucial for most superannuation members, particularly those not nearing retirement.<\/p>\n\n\n\n

The Impact of Market Volatility on Superannuation Balances<\/h2>\n\n\n\n

As the ASX 200<\/a> plunged by 461.40 points or 6.02% early Monday, superannuation balances, particularly for those in higher-risk investment options, were notably affected. For members with large balances or those exposed to both Australian and international shares, the losses were significant. <\/p>\n\n\n\n

However, the market showed signs of recovery by the afternoon, with the index bouncing back by 2pm, though still down 313.20 points or 4.08%.<\/p>\n\n\n\n

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It\u2019s certainly bad news for those closer to retirement or in retirement,<\/p>\n<\/blockquote>\n\n\n\n

AMP chief economist Shane Oliver<\/a> told NewsWire. For those with years before retirement, however, he emphasized that this market slump could present an opportunity. <\/p>\n\n\n\n

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But I think for most superannuation members with years to go before they retire, it is not necessarily a bad thing as their salary deduction that occurs every month will be invested in shares at a cheaper price – Oliver explained.<\/p>\n<\/blockquote>\n\n\n\n

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I think, for an ordinary superannuation member who\u2019s got 10 years plus to go, it\u2019s not a big event – he said. <\/p>\n<\/blockquote>\n\n\n\n

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These things happen every so often. Only three years ago, 2022 the Aussie share market fell 16 per cent.<\/p>\n<\/blockquote>\n\n\n\n

Expert Advice : Stay Invested for the Long Term<\/h2>\n\n\n\n

Economists, including Oliver, caution against making rash decisions based on short-term market fluctuations. Oliver noted that while the decline is concerning for those nearing or in retirement, it presents an opportunity for younger super members to invest at lower prices.<\/p>\n\n\n\n

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The worst thing to do in times like these is to react to day-to-day market movements by panicking and shifting your investment options during fluctuations without financial advice,<\/p>\n<\/blockquote>\n\n\n\n

Ben Styles, co-founder of SuperAPI, advised. He emphasized the importance of seeking financial advice before making any changes, particularly in times of market uncertainty.<\/p>\n\n\n\n

Older Members: Proceed With Caution<\/h2>\n\n\n\n

For those in their 50s and 60s, market volatility can seem more pressing. Ben Styles also highlighted the risks of reacting impulsively to short-term fluctuations. <\/p>\n\n\n\n

His advice was clear: make sure any decision regarding your superannuation is based on financial goals, not panic. Despite the recent market turbulence, industry experts suggest that a long-term view is key. <\/p>\n\n\n\n

The Australian Superannuation Funds Association (ASFA) noted that, on average, superannuation funds yield a 7.5% return per year over a 25-year investment period, significantly outpacing inflation.<\/p>\n\n\n\n

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Our research shows funds on average return 7.5 per cent a year over a 25+ year investment, which is around 5 per cent higher than average inflation – ASFA stated.<\/p>\n<\/blockquote>\n\n\n\n

ASFA also stressed that short-term market movements should not prompt hasty investment changes. <\/p>\n\n\n\n

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Each individual fund member needs to make decisions based on their financial goals and risk tolerance, however making changes to investment allocation based on short-term fluctuations risks locking in losses – a spokesperson said.<\/p>\n<\/blockquote>\n\n\n\n

The Broader Economic Context<\/h2>\n\n\n\n

While Australia\u2019s direct exposure to global tariffs remains minimal, the overall effect on the market is significant due to the country’s high exposure to Asia. <\/p>\n\n\n\n

Paul Bloxham, chief economist at HSBC, explained that this global shock is affecting local household wealth, including superannuation savings.<\/p>\n\n\n\n

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The effect of the global shock is also already impacting local household wealth through a high exposure to global equities via households\u2019 superannuation savings – he said.<\/p>\n<\/blockquote>\n\n\n\n

Despite these challenges, experts encourage investors to stay focused on the long-term outlook. <\/p>\n\n\n\n

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We\u2019re seeing a considerable impact, negative impact on the stock market that impacts Australians because superannuation funds have their shares there – Prime Minister Anthony Albanese said <\/p>\n<\/blockquote>\n\n\n\n

acknowledging the effects of the market downturn. However, he reiterated that investors should avoid rash decisions based on short-term market moves.<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite recent market fluctuations, experts stress the importance of maintaining a long-term perspective. Many investors could benefit from this volatility by purchasing shares at lower prices.<\/p>\n","protected":false},"author":9,"featured_media":103095,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46,45],"tags":[],"class_list":["post-103094","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-welfare","category-retirement","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/103094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/comments?post=103094"}],"version-history":[{"count":3,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/103094\/revisions"}],"predecessor-version":[{"id":103107,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/posts\/103094\/revisions\/103107"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media\/103095"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/media?parent=103094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/categories?post=103094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/au\/wp-json\/wp\/v2\/tags?post=103094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}