Current Sharemarket turmoil - What it means for your superannuation
The slump in sharemarkets has accelerated since Trump’s so called “Liberation Day” tariffs on 2 April 2025. From their February record highs, US Shares are down approximately 18%, Global Shares are down 16% and Australian Shares are down 15%, however, Fixed Interest has rallied – refer below.
As most of us have at least some of our wealth in shares via our superannuation, such falls can be depressing, however, seen in the context of share market history, which often sees periodic sharp falls they are nothing new. Also, this recent downturn follows two years of very strong returns.
As a result, you may see a negative effect on your super and investments in the short-term. History has shown us that even though share markets fluctuate regularly, the general trend is that they grow over time. Like all dips and major market events, it’s best to avoid knee-jerk reactions and stay the course by taking a long-term view.
At Goldsborough, we’re always focused on building well-diversified portfolios that can weather different types of market environments. Whilst some of our portfolios have 40-45% invested in shares, many are lower than this. Our portfolios also invest in Property, Infrastructure and Fixed Interest (Bonds and Corporate Debt), as well as Cash. This diversification is doing its job, as follows:
- Increased exposure to fixed interest (bonds and corporate debt) – over the past 12 months, we’ve gradually added to fixed interest, which helps cushion the impact of falling share markets.
- Defensive listed share market assets (global listed infrastructure and property) are typically a more defensive part of the sharemarket and this is proving to be the case at present. Infrastructure and property have outperformed global shares this year.
- Cash and currency – some of our active investment managers are holding higher levels of cash, giving us flexibility and resilience. In addition, the recent fall in the Australian dollar has helped offset some losses from international shares.
Whilst we can’t predict exactly how the tariff story will unfold, we’re well-positioned to adapt as needed. Our team is monitoring all investment markets closely and will continue adjusting portfolios in line with new risks or opportunities. At times like these it’s important to focus on basic investment principles:
- Share market pullbacks are healthy and normal – their volatility is the price we pay for the higher returns they provide over the long term.
- It’s very hard to time market moves – so the key is to stick to an appropriate long-term strategy.
- Selling shares after a fall, locks in a loss.
- Share pullbacks provide opportunities for investment managers to buy them more cheaply.
- Australian shares still offer attractive income (dividends) relative to bank deposits.
- To avoid getting thrown off a long-term strategy – it’s best to turn down the noise around all the negative news flow.
Boris Pedisic CFP®
Representative (No 301739)
