Investing in volatile markets 

While volatility in the markets can be unsettling, it’s important not to panic.

Investing in volatile markets

First published: December 3

It is the nature of markets to move up and down over the short term.

Long-term investment goals can be impacted when decisions are based on short-term market movements.

All financial markets exhibit some degree of risk, but the investment strategy underpinning our ready-made options has been positioned to minimise the effects of volatile markets on your super. Diversification plays an important role.

Diversification reduces the exposure to any one particular asset or risk. Exposure across different assets can help reduce the volatility of any one particular asset class
on your super savings.

LGIAsuper’s ready-made investment options (including our default investment option for Accumulation accounts, MySuper Lifecycle) are highly diversified.
 
This means a fall in one asset class may be offset by better performance from another asset less prone to volatile movements. 

Our single asset class investment options, while well diversified across different investment managers, strategies, industries and sectors, will exhibit greater concentration of specific asset class risk than our ready-made investment options. 

Our International Shares option, for example, will at times display similar volatility as global share markets. Although shares are volatile, they do provide the potential for higher returns than other asset classes. 

This is why it is important to understand the risk and return characteristics of the single asset class options in relation to your personal circumstances, goals, timeframe and tolerance for short term volatility.  

Knowing the level of risk you’re prepared to accept will help you decide which investment option is best for you. When it comes to investing, everyone has a different risk appetite. To learn more about yours, try our Investment risk profiler.

Chat with us

You can book an appointment with one of our expert financial advisers to discuss your investment strategy in greater detail. We even offer advice on investments outside super. This is known as Advice Plus. Call 1800 444 396 to find out how we can help.