Dangers in trying to time the market
Superannuation fund members have been cautioned against trying to "time the market" during the current volatility.
The warning has come from Chant West principal Warren Chant at the same time as he confirmed that the September quarter had produced the worst three-month returns since the dark days of the global financial crisis (GFC) in December 2008, following the collapse of Lehman Brothers.
According to the Chant West analysis, the median growth fund fell by another 1.0 per cent in September, contributing to a loss of 5.1 per cent for the quarter.
Chant attributed the decline to continuing concerns around the European debt crisis and the manner in which this had continued to send jitters through financial markets.
He pointed out the Australian share market was down 11.6 per cent for the quarter, with international shares falling 14.9 per cent in hedged terms and around 8 per cent in unhedged terms.
Chant said that property securities had also retreated with Australian Real Estate Investment Trusts falling 8.1 per cent and global REITs down 14.5 per cent.
He said that while some people might feel tempted to switch their money into cash or some other low risk option, they needed to be mindful of not crystallising their losses and exposing themselves to the risk of missing out on any potential upswing.
AUTHOR
Mike Taylor
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
