My partner is 18 years older than me. How do we plan for retirement?
Given the chaos that threatens to ensue from Donald Trump’s tariff policies, is a worldwide economic downturn inevitable? Should I transfer my superannuation savings from balanced into the cash option?
There is certainly additional volatility on stock markets at present and I appreciate your concern. However, it is well demonstrated that trying to time market entry and exit based on current news events leads to poor investor outcomes.
Research in the US by Dalbar found that while the S&P500 index delivered a return of 10.15 per cent annually over the 30 years to the end of 2023, the average investor in US equity funds earned 8.01 per cent.
Had these investors simply left their money alone, they would have generated better than 2 per cent extra in return – the inclination to tinker has cost them significantly. Over 30 years, an initial $100,000 investment left undisturbed in the index would have earned an additional $800,000.
Leave your investments alone. Even if you were lucky enough shift your funds just before some sort of collapse, you then need to be lucky a second time and pick the right time to get back in.
Riding the ups and downs is part of investing, and is why you are paid returns above cash.
Paul Benson is a Certified Financial Planner at Guidance Financial Services. He hosts the Financial Autonomy podcast. Questions to: [email protected]
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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