What’s happened: 

Share markets both here and overseas are experiencing volatility relating to uncertainty over the unfolding trade situation.

Key client messages:

• Recent market volatility is causing dips in investment values, especially in growth assets like shares. Conversely, defensive assets such as government bonds have rallied following a flight to safety.
• During periods of market volatility, you should try to avoid making hasty changes. Staying the course and sticking to a long-term investment plan is the key to success.
• Spreading investments across various asset classes can reduce risk and may enhance stability in a portfolio.
• We’ve been here before – think the GFC and COVID-19 pandemic. And markets have recovered.
• Time in the market – not timing the market – is a steady path to strong investing

Tip 1: Time in the market, not timing the market

Reacting to short-term market movements is rarely a good idea, and you should try to avoid being swayed into making hasty decisions based on day-to-day share market movements.

Extra reading: Mistakes to avoid when markets are turbulent

Tip 2: Set up a steady investing strategy

Making regular investments into your portfolio is a proven strategy to boost long-term returns. In fact, superannuation is purpose-built for making regular contributions over a long period of time, which gives you the ability to better ride out a bit of market turbulence.

Extra reading: The power of dollar-cost averaging

Tip 3: Diversify to stay strong through market volatility

Diversification – spreading your money across a range of different assets rather than putting it all in one place – is a core principle of investment risk management. That’s because returns from different assets are never consistent.

Extra reading: Why more investors are choosing diversified funds