You may have noticed that the global financial markets have been volatile recently. Most global markets are down from highs reached just a few months ago, while some, like the tech heavy NASDAQ, are hovering close to their opening 2018 mark.
We’re seeing similar patterns play out across the world, including right here in Australia. Every local super fund that invests in global and local markets is exposed to the same headwinds - we’re all in the same boat.
Many investors might wish they could sit this one out, on the sidelines. But when it comes to market drops, all the downturns of history have become rebounds, upturns and rallies. It may surprise you to learn many investors see down market days as opportunities, not financial hazards. Investors like Goldman Sach’s equity chief David Kostin, who sees the current stock market sell-off as a buying opportunity. To him, it’s like everything is on sale!
At Zuper we construct our portfolios around two key understandings - markets move up in the long term, and big global trends like renewables, biotech and emerging technology are the opportunities of the future to be invested in today. Yes, there may be dips in the short term, but the long term outlook of growth is what to be focused on. As our friends at BlackRock say, act on insight, not instinct. Your insight is knowing where the future is heading, and not allowing the bulls, bears and media clickbait to light up your instincts over the next weeks and months.
We hope this helps, and gives you some insights into how we think about the investment strategies we put together. One thing is for sure with superannuation - time in the market is better than timing the market, not to mention having your money hard at work building a future you want to live in.
This article is general in nature, and has been prepared without taking into account your objectives, financial situation or needs. You should consider if the information is appropriate and whether you need to speak to an accredited professional.
CEO and Co-Founder at Zuper Superannuation. Loves fintech, writing, pilates, Campari and soda's and, as of 2018, marathon running.More