It’s important to remember that each of our investment options, except Cash, has an investment horizon of at least three years, which gives your super time to weather market fluctuations like this.
While it may be tempting to change your strategy when you see share markets falling, in the long run it can make more sense to either stay invested or consider investing more. By changing to a lower risk option in a downturn, you risk selling out at a time when prices are low, rather than taking advantage of falls when markets recover.
Organisations around the world, from health organisations to governments and central banks, are working to limit the impact of coronavirus and stimulate markets and the economy. For example, to support the economy during this period of coronavirus induced anxiety, the Reserve Bank of Australia (RBA) announced on 3 March 2020 that it would lower the cash rate by 0.25 per cent to just 0.50 per cent.
The Governor of the RBA, Philip Lowe stated that once the coronavirus is contained, the Australian economy is expected to return to “an improving trend”.
“This outlook is supported by the low level of interest rates, high levels of spending on infrastructure, the lower exchange rate, a positive outlook for the resources sector and expected recoveries in residential construction and household consumption,” he explained.
While we can’t predict when the coronavirus outbreak will end, we know that like outbreaks in the past, it will eventually end; probably as it becomes one of the numerous viruses that circulate in the global human population and health treatments improve.