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Rethinking your investment strategy

21 August 2009

After some very good years of booming sharemarkets and healthy returns, the harsh reality of the global financial crisis has set in.

Returns for some investment options are down and many people have had to re-think their investment strategy. From 2003 to early 2007, QSuper members benefited from solid returns across many of the investment options. In mid-2007 the US ‘credit crisis’ started to emerge and, subsequently, volatility reared its ugly head in financial markets.

What began as something many people thought would be a short-term period of market volatility has turned into the global financial crisis. As a result, many people have suffered significant losses and, sadly, some investors now face a real challenge to recover from these events.

There have been many explanations of the effect the global financial crisis has had on markets, but what does that effect look like at an individual level? More importantly, what can people do right now to prepare for market recovery and perhaps regain any losses? To highlight the effect of the global financial crisis, we’ve put together a snapshot of three points in time that map the changing financial situation for one investor.

Case study

Things you can do right now

1. Make a critical assessment of your retirement adequacy
Will you have enough for a comfortable retirement? One of the easiest ways to do this is with the Super health check calculator on our website.

2. Re-visit your investment strategy
When the market is at its lowest, this is often considered as the point of maximum financial opportunity. So perhaps now is a good time to look at your investment strategy.

3. Consider the different actions you could take right now
- Salary sacrifice
- Consolidate your super accounts
- Review investment options
- Increase regular contributions³
- Make lump sum contributions³

One way to carry out any of these options is with the help of a financial adviser. It is possible the cost of seeking advice from a financial adviser could be recovered over time through the implementation of wealth creation strategies, including tax-effective savings strategies. QSuper facilitates access by members to competitively priced personal financial advice from Q Invest⁴, which specialises in helping people who are or have been employed in the public sector. Advice about your QSuper benefit is subsidised by QSuper, and as a result you only pay a small part of the total cost.

Call - 1800 643 893
Visit - www.qinvest.com.au

August 2009

History has shown that periods of negative returns are not an exception, just part of the cyclical nature of sharemarkets¹.

Sharemarkets generally recover¹, and although exactly when the recovery will happen can’t be predicted, it is important to think about what you can do to make the most of the recovery. In terms of investment cycles, now is an opportune time to consider the things you could do to boost your super and increase your potential retirement savings.

Remember, QSuper is here to help. If you have any questions about your super, simply call 1300 360 750. Our website also includes useful information, tools, and calculators designed to help you make the most of your super.

Article from August 2009 QSuper newsletter, SuperScoop - Insight edition.

1. It’s important to remember that any money contributed to your super cannot be accessed until you reach your preservation age.

2. Q Invest Limited (ABN 35 063 511 580, AFS licence 238274). Q Invest is jointly owned by the QSuper Board of Trustees and QIC Limited. QSuper and QIC do not accept responsibility for the financial advice or services provided by Q Invest, which is a separate legal entity.

3. Approx 70% rule of thumb sourced from The Senate ‘Selection Committee on Superannuation – Superannuation and standards of living in retirement’ report, December 2002.

4. ASFA/Westpac retirement living standards, September 2008. A comfortable lifestyle includes a broad range of leisure and recreational activities, health insurance, and occasional overseas holidays, and assumes home ownership.