Riding the volatility wave

Market volatility can be uncomfortable at any stage in life—but it’s important to maintain perspective. Here we explain some considerations for navigating uncertain financial times.

Markets have been volatile recently—both equities and bonds. Volatility can be uncomfortable for many, but the good news is that markets have historically recovered after falls*. We saw this after the fall in equities in February 2020 when the COVID-19 pandemic started.

Our Investment team here at UniSuper is well placed to handle market volatility. We manage over 70% of funds in-house across all major Australian and global asset classes with deep expertise across our team.

Trading off risk and return

Riding the ups and downs of financial markets is part and parcel of investing. History shows that assets that are more likely to fluctuate in value over short periods generally deliver higher returns over the long-term*.

Let’s compare shares and cash. The chart below illustrates how the two asset classes have performed since 2000.

ASX 200 Accumulation Index vs Australian Bank Bill Index (total returns) to from 1 January 2000 to 30 September 2023
Image 1: ASX 200 Accumulation Index vs Australian Bank Bill Index (total returns) to from 1 January 2000 to 30 September 2023.

Focus on the long term

While volatility can be stressful, it’s important to take a long-term view. Even people transitioning to retirement — or who have retired — may be investing for many years. So be patient, maintain perspective and be sure to seek advice if you need it. If you’re thinking about changing your investment strategy, some useful questions can be:

1. How much longer will my funds be invested?

2. How much risk am I prepared to take?

3. Is my investment strategy right for me?

One of our financial advisers, Derek Gascoigne, shares his thoughts on these considerations and on navigating market volatility.

If you need help, talk to our award-winning financial advice team. Simply make an appointment or call us on 1800 823 842 for more information.

Stay informed on what’s happening in markets and the economy

Our monthly investment podcast with our lead economist David Colosimo gives a snapshot of economic and market activity. We release these podcasts at the start of each month. Subscribe via Apple Podcasts, SoundCloud, Overcast, Stitcher, or wherever you get your podcasts or visit the podcasts page on our website.

Chief Investment Officer John Pearce also shares his insights in his regular investment update videos, watch his latest video.

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Investment update with John Pearce

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Navigating investment markets – ask an adviser

We chatted with financial adviser Derek Gascoigne about navigating investment choice amid market turmoil.

Choosing your investments in retirement

Retirement isn’t an ‘all’ or ‘nothing’ event. Whether you’re still working or dialling down, when it comes to your investments, the choices you make can make a difference.

*Past performance is not an indicator of future performance. The information provided is of a general nature only and does not take into account your individual objectives, financial situation or needs. Consider the PDS and TMD on our website and your circumstances before making decisions, because we haven’t. Please consider the appropriateness of the information having regard to your personal circumstances and consider a licensed financial adviser before making an investment decision based on the information provided above. Read the full disclaimer.
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