All financial investments involve some degree of risk. Regardless of the types of investment options you have chosen, you should realise that the value of your investment can fall. While no one likes to see the value of their investment fall, occasional negative returns are a normal part of the investment cycle for most assets.
Even the most conservative of investments will sometimes experience loss in value.
During times of market volatility, such as 2008, it helps to keep the following three key things in mind:
"¢ Investment markets move in cycles.
"¢ Overreaction to a negative return may cause you to realise your losses instead of withstanding them.
"¢ Having a long term investment strategy helps you to stay on track.
As Anglicans seeking to invest our savings and income wisely, we should also remember that everything we have comes from God, who has already invested heavily in loving his people and providing for them in every way. Anglican National Super has been in the market for many years, with a strong performance record and the wisdom to maintain a right perspective on market shifts.
The best of times, the worst of times
The past year has been dominated by the US housing slump and related problems in sub-prime mortgages as well as rising oil prices and, more recently, strong food prices. This has led to a fall in share prices and a rough ride for investors. It is important to remember that this unsettling time has followed a number of years of consistently good returns for many investors. That includes those who have become part of the Anglican National Super fund.
During the rest of 2008 returns are likely to remain volatile with weaker global economic growth and slower profit growth. Volatility, or changes in asset values which may result in negative returns, is a natural consequence of market uncertainty.
Historical evidence shows that asset types with greater risk (growth assets such as shares and listed property) produce greater returns over the longer term; however in the short term they are subject to greater volatility in their returns.
Asset types with less risk (defensive assets such as cash and fixed interest) tend to produce lower returns over the longer term but with less volatility. You need to strike a comfortable balance between the level of risk you are prepared to accept and your desired level of return.
Regular investment can help smooth the bumps
With regular investing, you don't have to worry about trying to time the market. If the market happens to be falling on the day your investment goes in, you get more for your money on that day. It is the opposite when the market is rising. This tends to "average' the cost of your investment and can help to "smooth out' market fluctuations. Where you invest the same amount at consistent and regular intervals, this is known as dollar cost averaging. When you average it out, you will generally come out ahead.
Contributing regularly to your superannuation is one example of this strategy. Contributing to a fund that upholds strong principles of Ethical Investment ensures that your superannuation is not just averaging good returns for you but is utilising your investment to achieve good things for all of us.
Who can join Anglican National Super?
Plan membership is available to everyone (along with their spouse and family members) employed with an Anglican Organisation or a select group of like-minded Christian organisations.
More information?
"¢ Contact your payroll department
"¢ Phone Anglican National Super on 1300 364 984
"¢ Phone the ANS Business Relationship Manager at AMP - Paul Willis on 02 9257 2694
"¢ Go to [url=http://www.amp.com.au/anglicannationalsuper]http://www.amp.com.au/anglicannationalsuper[/url]
Any advice given is general only and has not taken into account your objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.
