Making the right investment choice

Is your investment choice costing you money or is it the best choice you have ever made?

Have you made a choice?

The Global Financial Crisis (GFC) which landed on our doorstep in 2008 suddenly and radically had immediate implications for superannuation investors. I remember hearing much of it in the media and hearing comments like “Millions wiped out from Superannuation”, “Retirees suffering from losses and forced to return to work”.

Most Australians are invested in a superannuation fund that has at least some investments in the share market, from the mid 90’s to 2008 we saw superannuation contributions rise along with a strong share market growth. ,

For many years superannuation investors were reading their annual statements and often looking at returns upwards of 20% p/a. Many investors didn’t take notice which investment choice they had made or had been made for them. Understandable when you are getting returns as good as that.

Then come 2009 superannuation statements were showing returns more like -20% and then came the awareness to many that they may have made the wrong investment choice or neglected to make one at all. This was now costing them money. Inaction and poor investment decisions had a terrible impact on older Australians and those already in retirement.

How could this happen? And so quickly? I had many clients say to me “I thought superannuation was safe”?

Well, it depends on the investment choice you make. Many people didn’t realise that their superannuation account balances changed on a weekly or even daily basis. Every time your money is invested in Super, it becomes active in the investment choice you make.

Making the correct investment choice is just as or if not more important than any tax benefit you might gain from investing in Super. So ask yourself, is my super going in the right direction? Have I made a proper and informed decision where my retirement savings are going to be invested?

There have always been highs and lows in the investment market and even though we have seen significant recovery in some super funds invested in the Australian share market, it will always be subject to change.

The sensationalist headlines such as “Millions Wiped Out” from super are not necessarily as bad as it sounds. The majority of super investors at that time were, and still are invested in funds that strike a unit price on a daily or weekly basis, just like share prices. The paper value of your super may have changed but you still owned the units. They were just at a lower price at the time. There can be opportunities to gain when markets are low

Making an informed investment choice will help you either gain from that change or lose from it. It is vitally important that you should seek professional advice before actioning any plan.

There are many factors that need to be discussed, such as your age, when you plan to retire, how comfortable you are with changes in investment markets, what you are trying to achieve and what you are willing to risk

Every adviser at WealthPartners is committed and able to advise you

  • We accompany you every step of the way in your financial journey
  • We begin with meeting you and learning about your goals, dreams and aspirations. We then work with you to build a plan and investment strategy to make sure you reach them. It doesn’t stop there; we endure to maintain a lifelong relationship with you as our client
  • We are only a phone call or email away.

Next week…….. Insurance within Superannuation.


David Luciani
Corporate Services Specialist

Follow David on Twitter @DavidGLuciani