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Markets are going up! What does this mean for my super?



On January 13 this year I wrote a post The markets are down! What’s going to happen to my super? What do I do? And here we are a little over 2 months later and the contrast could not be greater.  Welcome to the world of investing!

So what do all these numbers mean and how does it impact on my super? Well, for the majority of people, their superannuation has some level of exposure to Australian stock markets.  To get an idea of how the market is performing, you can simply follow one of the indices such as the All Ordinaries Index or ASX 200. 

Without getting too technical, these are a basic measure of how the majority of the companies on the Australian stock exchange perform on average on any given day.  Normally reported on the news at night you’ll hear statements like” the All Ords went up half a percent today”.

On Feb 12 this year the All Ordinaries sat at around 4800 points.  It’s currently sitting at 5240 points which means an increase of around 9%.  That’s an annualised return (i.e. if it keeps going like this for 12 months) of over 50%.

Of course, markets are unlikely to perform at this rate on a sustained basis however to put it in perspective, our market hit it’s all time high of 6873 points in November 2007 just prior to the Global Financial Crisis.  At that point it dropped and has been slowly recovering ever since.  As at today the All Ordinaries is currently sitting at around Feb 2010 levels and to get back to where it was in 2007 it needs to go up by another 31%.

The exposure your superannuation has to Australian stock markets will very much depend on your fund selection, time horizon and risk profile.  For many of my clients, their long term time horizon and high growth investor profile has meant that the use of internally geared funds has been appropriate.  Since Feb 12th to date, these funds have gone up over 20% which is a strong result.

Either way, the most important thing is that you review your superannuation regularly.   You may be missing out on significant opportunities by simply ignoring your super and hoping for the best.  Take control of your super, for many it will be their biggest asset in life so it pays to get it working for you.

Have a safe an Enjoyable Easter and give some thought to contacting me after the break for an informal chat about your super and how to get the most out of it for you.

Andrew O’Brien and Hindsight Group Pty Ltd t/as Hindsight Wealth Pty Ltd (ABN 88 168 442 528) are Authorised Representatives of Synchron AFS Licence No 243313.  

Andrew O'Brien. FINANCIAL ADVISER. P 07 3852 3025  0403 156 625  E andrew@hindsightwealth.com Suite 4 / 30 Florence Street, Newstead QLD 4006.  

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