Volatility proof your super

On one hand, planning for retirement can be exciting.

But on the other, it can cause anxiety.

If market volatility would concern you, it might be worth taking a look at how your super’s invested, assess your retirement goals, and if needed, put a volatility lens on your super.

Our unique investment philosophy guides the way we invest your super savings.

We actively manage your super, taking advantage when markets rise.

But we also protect your super during volatile times.

What’s market volatility?

Volatility happens when the prices rise and fall - often sharply and suddenly.

Temporary volatility is a normal part of long-term investing. Your super’s invested in global markets, and downturns come and go over time.

Watching your account balance go up and down can be frustrating. But volatility isn’t always a bad thing. It can also provide opportunities for your super fund to invest in assets at a lower price than they were before the market correction.

Over time, we’ve seen markets bounce back and give investors growth over the long term.

How much volatility can you handle?

The level of volatility you can take on comes down to how much investment risk you’re comfortable with.

If you’re worried about your super, here’s how we’re supporting you to embrace the risk level that’s right for you and make the best choices for your financial future.

It can be hard to know how much risk to take in the lead up to retirement.

In general, the lower the risk, the lower the expected return over the long term.

So, investing conservatively may help you avoid market lows, but it could also mean you miss opportunities to grow your balance.

To keep it simple, think about how much risk you’re willing to take to afford your retirement lifestyle and still sleep soundly at night.

Choose an investment option that suits you

Once you understand your risk appetite you can then review your super investment strategy.

CareSuper offers a range of investment options each with different targets for returns and levels of investment risk.

They are made up of two separate asset types:

The first is what we call growth assets. These are generally made up of higher risk things like shares and property that are more aggressive with a value that can fluctuate over time.
The other type are defensive assets which are invested in more low risk assets such as cash and fixed interest.

The more growth assets you hold the more likely your returns will be higher over the long term, but also more volatile in the short term due to market forces.

To decide what will work for you look at the options available, drill down into their specific asset allocations and weigh up the average return figures.

Consider downside protection

As part of the CareSuper investment philosophy your super is invested to minimise the impact of negative returns when the market falls.

This is called ‘downside protection’.

Protecting against downside risk means your super is better prepared for market downturns, and you can be more confident about recovering losses.

Know that you’re not alone

Market volatility can be unsettling but we’re here to help. As part of your CareSuper membership you have access to our super advisers^{^} who can:

Assess your appetite for risk
Discuss your investment options as a CareSuper member
Help you understand if you're on track for retirement.

If you need more complex advice, then speak with one of our financial advisers*. They’ll consider your whole financial situation, including your spouse, any assets you have outside super, your debts and your financial goals to help you plan your ideal retirement.

At CareSuper, our role is supporting you, our members in achieving your retirement goals. So, if market volatility is keeping you awake at night, please give us a call. We can’t wait to hear from you.

^Advice is provided by CareSuper Advice (ABN 78 102 167 877, AFSL 284443). A copy of the Financial services guide for CareSuper is available at caresuper.com.au/fsg

*Advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.