Share markets - playing the long game
It’s no secret that I love a plan – and there’s a reason it’s important to have one and stick to it.
Did you know that most super funds lost 10% of their value towards the end of 2018? Should this worry you? No, and I’ll tell you why.
Between July and December 2018, the Australian share market lost around 9%. There were plenty of headlines at the time about the billions of dollars being lost from the market, it was on the news a lot and it was quite scary – but it’s also important to put an event like this into perspective.
Between December 2018 and March 2019, the Australian market actually recovered back to virtually where it was before. We didn’t hear about this in the news (because bad news sells more than good!) but slowly and surely, the market bounced back, and this is why it’s important to be patient, and stick to your investment plan.
Need more proof? If we take a trip all the way back to 2016 and compare where the market was then vs. where it is now, it’s actually up 24%. So even with the 2018 market upset, it’s still well ahead of where It was 4 years ago.
These examples both show why it’s important to have a plan and stick to it. It’s certainly worth checking what your investments are doing and staying across the latest share market news, but reacting to what’s happening in the here and now isn’t always the best idea. Markets always have their ups and downs, so your focus should be on making sure you have a good plan in place.
When we help our clients put together investment portfolios we always make sure there is a buffer between the ‘growth’ assets, like shares; and the ‘defensive’ or safer assets, like cash. We call our strategy the ‘three bucket system’. It’s designed to be a plan we can put in place and stick to long term, and it’s something we can implement for you too. if you want to have a chat about it.
Get in touch if you would like to discuss your investment plan, and if you’re looking for regular market updates and other tips and tricks, our Facebook and YouTube also have a wealth of information.