Ask Paul: Why is my super losing money every week?
I've got my money in super. Last year gave me great returns, but this year it's another story.
The sharemarket has been going from strength to strength but I'm still losing money just about every week. What could be the reason for this? - Sal
Last year was just a super year for super, Sal. Excuse the poor dad joke, but it did turn out to be a ripper.
We have short memories, though. All our super got smashed in March 2021, but values recovered so quickly we all forgot about that!
I've been around money and super for what feels like longer than when the dinosaurs roamed.
An advantage of this is that I am well aware that assets, such as shares, property, fixed interest, infrastructure and private equity - which will all be in just about any balanced or growth-style fund, have wild returns in any one year.
I've watched shares fall by more than 60% in a few months, and boom more than 60% in a year. I've seen plenty of property busts and investment failures.
What I think matters for you, me and most of us in super is long-term returns. In the 30 years or so of compulsory super, a decent, low-cost, well-diversified, balanced type fund has earnt around 8% to 9% a year on average.
And this is the key: long term and on average. Neither you nor I have the first clue what will happen to investments in a year or even three.
But in the long term, history is on our side.
Frankly, I would not get too excited in good years or bad. Let time work for you.
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