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Fast facts about share market volatility and super

Fast facts about share market volatility and super

Understanding the highs and lows of a volatile share market.

Unless all of your super is invested in cash deposits, your super will generally be impacted by the share market and how it performs.

When the share market fluctuates a lot over a short period of time, it’s easy to become excited or nervous. However, it’s important to remember that super is a long-term investment and not a get rich quick plan. Looking at how super funds perform over a number of years, rather than a few weeks, provides a more realistic view of their success.

Q: How does a volatile share market affect super?

Super is generally invested across different investment options – cash, fixed interest, property and shares. As a result, it is likely to be impacted by both Australian and overseas share market activities.

The extent of the exposure depends on the individual investment option and how it’s invested, also known as ‘asset allocation’.

Q: How does my age affect super in a volatile market?

You’ll most likely experience a number of share market cycles over the years. Sometimes your super balance will increase due to market volatility, and at other times it will decrease. But if you start investing early, there is more time for super to recover from the ups and downs of the share market.

Q: Should I be worried when the market fluctuates?

It’s natural to feel worried about super when the share market has dropped in value. However, it’s important to stay calm and remember that if your super is a Lifestage or Balanced investment option then shares are just one part of the asset allocation.

Also don’t forget, super is a long-term investment and over time it should recover from any short-term losses.

Q: What can I do to help protect my super?

It’s hard to predict the future of the share market, but here are ways you can  take control of your super today to help secure it for the long-term:

  • Speak to a superannuation expert so you can understand where your super is being invested before you make any decisions.
  • Consider which investment options suit your life-stage. Remember, if you’re years from retirement you should have time to recover from share market ups and downs.
  • Take control of your super and consolidate your accounts to avoid multiple fees. 

For information on the range of investment options available visit Essential Super.

Things you should know: This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. Colonial First State Investments Limited ABN 98 002 348 352, AFS License 232468 (Colonial First State) is the Trustee of Commonwealth Essential Super ABN 56 601 925 435 (Fund) and the issuer of interests in Essential Super which is a product of the Fund. A Product Disclosure Statement (PDS) for Essential Super is available from commbank.com.au/super or by calling 13 4074. You should read the PDS and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. Colonial First State is a wholly owned subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124 (‘the Bank’).The Bank provides certain distribution and administrative services to the Trustee. The Bank and its subsidiaries do not guarantee the performance of Essential Super or the repayment of capital by Essential Super. An investment in Essential Super is via a superannuation trust and is therefore not an investment in, deposit with, or other liability of the Bank or its subsidiaries. An investment in Essential Super is subject to risk, loss of income and capital invested. Important things to consider before consolidating your super: Remember, before you make a decision about your super, you should compare the costs, fees, risks and benefits of your other super funds with Essential Super. It makes sense to consider whether you can replace any insurance cover you may lose when you bring your accounts together, as well as any costs for withdrawing from other super funds and any investment or tax implications. You should decide which super fund you want your employer to pay your future employer contributions to and complete a Super Choice form if necessary.