Pre-retirees told not to panic as market meltdown hits super balances | jcollett_money
Super accounts took a beating this week following the carnage on world sharemarkets, with the return of the typical “growth” investment option for this financial year sitting at about minus 5 per cent.
The volatility in the markets was heightened after the US Federal Reserve lifted interest rates by 0.75 percentage point, the biggest increase since 1994, as it seeks to rein in inflation. In response, sharemarket investors took flight on recession fears.About 55 per cent of the allocation of the typical growth option is to Australian and global shares.
“We see it time and time again that markets rebound and the only question is how long it takes,” he says.Pre-retirees have long investment time-frames - with decades in retirement - and so can afford to be invested in riskier assets to achieve the expected higher returns over the long term, McIlroy said.
Market analysts say rising inflation and higher interest rates could extend the current bout of volatility.
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