The impact of stock market changes on your investments

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Transcription

Announcer: 96.5 we’re your family’s number one, it is Wednesday evening and it’s time to catch up with my favorite finance lady, it’s Helen Baker, hey Helen!

Helen: Hey, thanks, how are you doing?

Announcer: Good, thank you. Now you’ve got the latest scoop that is everything share market at the moment with all that stuff that’s happening.

Helen: Yes, I think it’s been a funny week in terms of you know, we used to say when the USA sneezed then Australia would catch a cold and now it seems like it’s if the USA sneezes, and China sneezes, Australia catches a cold, which is quite interesting given it’s flu season. But yeah, I think it’s important for everyone to be aware that at times like this, there are going to be movements in the market and we should actually expect volatility when we are investing in things like Australian shares or international shares, emerging markets, property, all those kind of things because they are big assets and they are likely to move around.

So if you’re not comfortable with having all your investments in there, one could argue whether you should have all your investments in those markets anyway, you’re looking at alternatives such as things like cash or term deposits and so on. But the problem with holding money in cash, is that although you have no volatility, the value of your money will decrease over time.

And that’s really important for our listeners who are investing in superannuation or things like that for a long time, then if they just invested in cash or term deposits, there’s not going to be the growth that you would have at the other side of the coin with like Australian shares or international shares, but the difference is that, at that extreme we have to expect volatility. It is unrealistic that the market will always just go up and there will never be any kinds of ups and downs and so it’s about knowing that as an investor, being comfortable with the level of risk you’ve taken, so it’s really important at this time that people actually check how they’re invested. Because most people don’t know.

Announcer: No yeah, definitely. As you say, it’s making me think about where I’m putting my super and what’s happening with that. We just need to be a little bit mindful at the moment don’t we?

Helen: Yeah, and not to panic. Even if you might not be exactly how you want to be invested. Maybe just wait for a little bit to settle down before you start making those adjustments because it’s when things are moving that high and that low, you will potentially lose money if you muck about with your portfolio so if you start being a long-term disciplined investor, but also reviewing whether or not you’re invested the way you should be invested according to your risk profile and your age and what it is that you are trying to achieve. Because sometimes people don’t have to take any risk at all, whereas other people really don’t have a choice because they’re too far behind and they’ve got to make up the gap. So it’s really about seeking advice and doing what’s appropriate for you.

Announcer: Okay, well brilliant, Helen, you always put things so clearly for us. If people want to find out more, they just need to head to www.OnYourOwnTwoFeet.com.au. We’re looking forward to catching up with you next week.

Helen: Thanks, everybody have a good week. Cheers! Bye!