Investment markets are always cyclical. A balanced investment profile is expected to yield a negative return one year in six. So it’s surprising that panic occurs when this one in six year event happens. It’s important to ensure your investment portfolio (or superannuation/pension accounts) have a diversity of asset classes to moderate the impact of market movements. By constructing a portfolio that has exposure to cash and fixed interest to meet income needs, then a market downturn should not cause any concern. The active asset allocations in a portfolio, being Australian and International shares, property and infrastructure, are always going to be subject to more volatility.
If we stick to the course through investment cycles we know in the long run that investment objectives will be achieved. What is more important than the current market movements is that you have an asset allocation that is appropriate for your time frame and preparedness to take on risk. It is important not to react to newspaper and news articles. The reporters are not concerned about your best interests and you reaching your long-term financial objectives, but are keen to sell a story now with the maximum dramatic potential, so don’t panic!