The current financial crisis that we are experiencing is quite nerve racking. Today, the All Ords feel by about 7% and all the gains, if not more, made over the last 12 months. Today, it closed at 5222 points, down by 408 points. As reported by The Age, this is the one day biggest drop in the share market in the 18 years, and the longest losing streak since January 1982.
Luckily, it does not really impact me significantly as we only own a small parcel of Telstra shares, which was purchased during the T2 offering. However, the real impact to us would be how our superannuation will be performing. Like many other Australians, some part of our superannuation are invested in the local Australian share market. With the investment mix of my superannuation, about 10%-15% is expose to movements of the sharemarkets. The way I view it, superannuation is a long term investment and is not due to mature for another 30 years for me. So I have decided not to panic and leave the investment mix alone to ride the down slide out.
My friend calls this the sleep factor. If the situation is affecting you to an extend that it is disturbing your sleep at night, it is probably time to be less aggressive with the investment mix.
The market did slide down quite significantly when the dot com bubble busted just after the turn of the century and my superannuation net worth actually went down, but it recovered in spectacular fashion.
For some people whom superannuation are about to be accessible in the next few years, these are certainly nervous times. I would say to them to get some profession advice.