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What’s going on in global share markets?

2 February 2018

I’m seeing lots of negative news headlines. What’s it all about? Should I be worried?

Global share markets have been experiencing a meaningful decline, starting with the US on Friday 2 February. The trigger for the sudden drop in share markets was the release of the monthly employment report in the US showing stronger than expected increase in employment and a long-awaited pick up in wages growth. This has raised expectations about rising inflation in the future.

Although the news headlines coming out of the US may appear scary, the declines on Friday and Monday have only taken those markets back to the levels they were at the start of 2018.

What is Sunsuper’s take on the market turmoil?

Although the selloffs on Friday and Monday were caused by worries about US inflation, behind those worries is the fact that US economy has been growing at a strong enough pace to generate jobs, reduce unemployment, and (finally) generate higher wage increases. This is not bad news!

What does this mean for my super? As a Sunsuper member, should I be worried?

One of the best defences against uncertainty in financial markets is diversification, and many of Sunsuper’s investment options are diversified for this reason. Whilst many of our portfolios have exposure to shares, they also have substantial allocations to other investments including property, infrastructure and private capital investments which are not listed on share markets.

Our investment strategies are set with a medium to long-term view, which means we take into account short-term movements in financial markets when building our portfolios. Our enduring advice is to maintain investment strategy unless the outlook for markets has substantially altered due to a meaningful economic or market event. At this stage we do not believe either to be the case.

Where can I get more information?

You can read more commentary from Sunsuper’s Chief Economist Brian Parker here.

If you’re unsure and want to speak to someone about what this means for your Sunsuper portfolio, please call us on 13 11 84 to talk to one of our experienced financial advisers who can provide you simple advice about your Sunsuper account at no additional cost.