Aware Super's modelling reflects on the GFC of 2008, where Australians who remained in high-growth super investment options significantly increased their retirement funds by 2025 compared to those who shifted to cash during the crisis. The report also shows retirees who stayed in conservatively-balanced pension options rather than opting for cash saw an increase of $8,500 annually in their retirement income.
Despite the ASX losing nearly 50 per cent between late 2007 and early 2009 following "Black Monday," Aware Super's chief investment officer, Damian Graham, emphasises the importance of staying invested. He contends that market fluctuations are natural and that deciding to shift investments based on short-term movements can be detrimental to long-term retirement objectives.
Mr Graham also noted the financial consequences during the Covid-19 market downturn. Individuals who switched to cash lost up to $58,000 for every $100,000 initially in their super. He advises that, despite market instability exacerbated by Middle-East conflicts and past U.S. tariff policies, Australians should adhere to a long-term investment strategy.
The report underscores the success of Aware Super's diversified investment strategy, which spreads risks and capitalizes on global market opportunities. Such a strategy has proven effective at reducing potential losses during specific market declines.
