Investment12 October 2018

Wall Street slump: Are we doomed?

Ian Lundy
Ian Lundy
Chief Investment Officer

Like February’s stock market slide, the recent fall in equity markets has received a lot of media coverage. As at the time of writing, the main US stock index, the S&P 500, has fallen 5.3% this week. Despite this fall, it’s still up 6.8% over the past 12 months.

Australia has performed broadly in line with the US market with a slight positive performance on Friday.

Going forward, it’s possible that we may see more volatility than we’ve been used to over the last five years and it’s important to not over react to short-term noise. 

Tasplan takes a long-term view and doesn’t attempt to time markets as history shows this doesn’t work consistently. That said, we are relatively conservatively positioned as we felt valuations were stretched and we had recently trimmed our global equity holdings.

What action should you take?

It’s understandable in times like these that people question the security of their super.

At Tasplan, we always protect our investments through diversification. We also encourage members to consider the benefits of diversification, to be patient and to maintain a longer-term view for investing their super.

Members should also carefully consider their own circumstances and avoid making impulsive decisions in these challenging times.

Members may be tempted to react to short-term market falls by changing investment options, typically by switching to cash. Unfortunately, this often proves to be a poor decision. Moving after the market has fallen means missing out on the recovery. For most people, the best approach is to stick to a long-term plan.

Past performance is not a reliable indicator of future performance.

This article contains information or advice that is intended to be general in nature and which was prepared without taking into account your personal objectives, financial situation or needs. Because of that, before acting on any information or advice in this article, please consider whether it is appropriate to your personal circumstances, talk to a financial planner and consider the relevant Member guide, available at tasplan.com.au or by calling 1800 005 166, before making a decision about whether to acquire the products.

The trustee of Tasplan Super (ABN 14 602 032 302) is Tasplan Pty Ltd (ABN 13 009 563 062). AFSL 235391.

Investment update from our Chi...

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