How to ride financial roller coasters



And make the most of market cycles.

Financial markets go up and down. It’s a fact. You’ll never be able to entirely eliminate volatility, but you can find ways to manage the risk and perhaps even make it work in your favour.

Market volatility and you

Your super is a long-term investment. During its lifetime, your funds will be exposed to many market cycles. And because your super is invested in these markets, your account balance will also move up and down. It’s important to understand that volatility is a natural part of the cycle and experiencing some periods of negative return is all part of the super journey.

When it comes to bumpy markets, fear is a natural reaction. One of the best ways to manage both your emotions and your investments is to arm yourself with the right information and put a solid plan in place. This will make you less likely to deviate – even when the roller coaster performs a loop and emotions run high.

Don’t neglect diversification

The market can dip and rise in response to economic data, political events or company announcements. There’s no guarantee which asset classes or sectors will perform well or be adversely affected. But diversification can help deliver smoother, more consistent results over time. Think of diversification as not keeping all your eggs in one basket. By spreading your funds across a variety of asset classes - shares, property, fixed income, bonds and cash - you can soften the effects of any share market falls while being less reliant on any one asset class at any particular time. We offer a range of mixed investment options that are already diversified. You can view your options here or login in to Member Online to make an investment choice.

Understand your risk profile

Choosing how to invest your super is a personal decision that comes down to your financial situation, time horizon and appetite for taking risks. No investment is completely risk-free, but some bring more risk than others. The rule of thumb is, the higher the expected return, the greater the risk.

If you’re early in your career, placing your money in an investment option that is exposed to growth assets could be a great way to maximise your super’s potential. The closer you get to retirement, the less time you’ll have to ride out the market fluctuations. If that’s the case, you may want to consider a lower risk investment strategy to better protect your money.

Think in years, not days

Turbulent markets can be nerve-wracking but it’s wise to remain calm. Often, the most sensible thing to do during periods of extreme market volatility is to stick with the plan you already have in place. Being reactive and switching to alternative investments may mean missing out on future market improvements.

History has also shown that markets tend to recover just as quickly as they fall. In fact, over the long term, the general trend of share markets has been upward.

In short, it is often more beneficial to ride out the bad times in order to achieve long-term growth.

Remember, super is a long-term investment and choosing the right strategy is important. We recommend regularly reviewing your investment options to ensure your super is working in your best interest.

Get the right financial advice

If you have questions about your super investment options or retirement strategy, the VISSF Advice Team can help. We can answer simple questions over the phone at no cost, or if your situation is more complex, we can arrange comprehensive financial advice. Find out more by calling 1300 660 027 between 8am and 5pm (AEST) and ask for the VISSF Advice Team

Did you know?

Bull versus bear markets

A full market cycle includes a bull and a bear market. But what do these terms mean?

When the economy isn’t doing well and prices have or look like they are moving down, it is a bear market. On the other hand, a bull market occurs when the economy is doing well and stocks are rising or expected to rise.

The names are derived from the way each animal attacks its prey. A bull will drive its horns up into the air, while a bear swipes its paws downward upon its prey.

Find & combine

Consolidating your super into one account makes your money work harder because you save on paying multiple sets of fees.

Learn more