Your super return this year

It’s unlikely that investors will remember the last financial year with any great fondness, as we saw sharemarkets around the world fall, and terms like ‘Global Financial Crisis’ and ‘Recession’ became common place.

With the exception of cash and bonds, most asset classes such as Australian Shares, International Shares and Property recorded negative results. Depending on your choice of portfolio, your super will most likely have been invested in some or all of these assets. As a result you may find your super hasn’t grown as much as in previous years, and your balance may even have reduced.

The good news is that a recovery appears to be on the way. Over the six months to 31 August 2009, GuildSuper’s Australian Shares portfolio recorded a positive return of 31.3%, the GuildSuper Property Securities portfolio returned 29.9% and the GuildSuper Growth Plus portfolio returned 18.7%.

While we certainly can’t say the market is in full recovery mode, this result is a timely reminder of how important it is to stay invested so that when the market recovers you are there to benefit.

Have a plan and stick to it

When sharemarkets are struggling it’s natural to consider moving your money to a “safer”, more conservative investment to avoid the pain of a market downturn. However, doing this will only lock in any short-term losses and means you won’t be invested when the market recovers, as it has in the past. It may also result in lower overall returns, because investments that don’t vary much from year to year tend not to provide the best returns in the long run.

The lesson here is not to react emotionally to any short-term bumps, and to stick to a plan that suits you and your long-term needs.

The following reports are available to download. Larger files may take longer to download, depending on the speed of your internet connection.

Investment report December 2009