Share market volatility
and your super

For many Australians superannuation is or will become one of their biggest assets. For this reason, when share markets become volatile and start to move towards a downturn, a common response is to become concerned about what is happening with your super.

10 things to remember about investing and your super

  1. Volatility is normal, we’ve seen it before and we’ll see it again.
  2. Over the medium to long term, share markets and asset prices recover from downturns.
  3. Share market downturns are short-lived when seen in the context of your working life.
  4. Current share market volatility was brought on by a pandemic and pandemics end.
  5. Your super is not only invested in the share market, it is commonly invested in other assets like Property, Cash, Fixed Interest and other Alternatives investments that perform very differently to shares i.e. some investment assets have performed well recently which has reduced overall volatility.
  6. Your super is a long-term investment, for many this money will be invested for the rest of their lives, not just until they retire.
  7. Switching after share markets have taken a turn for the worse means crystalising those losses. Recovery of markets can occur quickly and re-investing into shares at the right time is an impossible task that even experienced investors and institutions cannot successfully implement consistently.
  8. Being invested in the market is important if you want to recover any losses you’ve experienced.
  9. If you do choose to make a change to how your super is invested, there are two very difficult decisions to be made. First, when to move out of the market and second, when to move back in.
  10. Get advice, after all that’s what we’re here for!

Think twice, get advice.

Remember, you’re not in this alone. The team at EISS Super are ready to help you. To make an appointment with one of our Financial Planners, please call 1300 369 901 (and select option 2) or visit eisuper.com.au/appointment.



Case study: EISS Super’s investment options during and after the Global Financial Crisis (GFC)

A long-term approach to investing means holding steady during a downturn so you are invested in share markets when they start to turn around. This ensures you are well placed to recuperate your losses and benefit from the comeback.

The following charts provide a comparison of what a member’s experience would have been in the 10 years following the GFC if the member had maintained their investment strategy compared to if they had switched to Cash. For the purpose of the illustration we have assumed the switch occurred at the bottom of the downturn because this is what we often saw.

In all instances, members who remained in their original investment option throughout the GFC made up the initial loss plus more, whereas for those who switched to Cash the losses were not recovered in the ten years that followed the GFC.

Please note, past performance should not be regarded as an indication of future performance.

High Growth vs Cash
High Growth vs Cash - EISS Super
Balanced vs Cash
Balanced vs Cash  - EISS Super
Conservative Balanced vs Cash
Conservative Balanced vs Cash - EISS Super
Conservative vs Cash
Conservative vs Cash - EISS Super
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