Volatility? More Like Opportunity!
As you may have seen in recent news and media, the Global Share Markets (in particularly, the USA and Japan) have experienced volatility for the first time in recent years. This volatility comes from short term investment traders making comments about how increases to the US interest rates will slow corporate profit growth. Consequently, markets reacted and over reacted. The media promoted “billions wiped out” stories, when in reality the market has only retracted to mid-December levels.
Throughout this media hype, I thought I would take this opportunity to provide my thoughts to you about how this may impact you, and how it may tie in with your potential superannuation strategy.
For accumulators, (people contributing to super, not withdrawing) during times of market volatility there is ample opportunity to purchase assets at discounted prices to their recent market value. History shows that over the medium to long term, markets will bounce up and down from time to time, however unless we actually sell assets to fund withdrawals, we haven’t actually lost anything – contrary to what media outlets will tell you!
The question that we really concern ourselves with is “where are corporate profits growing in the global economic scenario?” this leads us to place investments that while in the short term may be volatile, they should do well in the medium to longer term.
As a result, whenever you see or read commentary about the market in ‘downward spirals’ or ‘plunges’ we need to remember that this means opportunity and excitement for the road ahead, not fear and loss!
Please give me a call if you want to discuss further!