Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
Riding the wave of volatile markets through the golden years
In the vast landscape of investment, retirees often find themselves on a rollercoaster ride, grappling with the unpredictable twists and turns of market volatility. It’s a wild journey, but there are strategies to not only survive but thrive during these tumultuous times.
Picture this: you’ve worked hard, saved diligently, and finally entered the realm of retirement. The golden years should be about relaxation and enjoyment, but the market has a knack for throwing curveballs. So, how does one maintain peace of mind while their nest egg weathers the storm?
Diversification, patience are key
Imagine if your entire retirement portfolio was riding on the success of a single stock. One bad earnings report, and your dreams of sipping cocktails on the beach might evaporate.
Diversification acts as a financial shield by spreading investments across a variety of asset classes, such as stocks, bonds and real estate. Not putting every egg in one basket helps reduce the impact of any single market swing on one’s overall wealth.
Market volatility is like the weather – unpredictable and ever-changing. The knee-jerk reaction of selling everything when the market takes a dip can be tempting, but seasoned investors know that patience is key.
History has shown that markets tend to recover over time. Staying the course and resisting the urge to make impulsive decisions positions an investor to benefit from the eventual rebound.
Be prepared for the unexpected
A stable retirement plan requires an emergency fund. This is a financial cushion, providing peace of mind when the markets are anything but calm.
Aim to set aside at least six months’ worth of living expenses in a liquid and easily accessible account. This removes the likelihood of being forced to sell investments at a loss during a downturn to cover unexpected expenses, allowing long-term investments to weather the storm.
The financial world is ever-changing, and so are investors’ personal goals and risk tolerance. It’s important to periodically reassess a portfolio and rebalance it to align with the investor’s current situation.
If one asset class has outperformed others, it might be time to trim those gains and reallocate to areas that offer more potential. This proactive approach keeps the portfolio in line with investment objectives, reducing the impact of market turbulence.
Professional guidance: The expert navigator
As with any investment, managing a retirement portfolio benefits from professional guidance. A financial adviser can provide invaluable insights, helping investors navigate the complexities of the market and tailor their strategy to align with their unique goals. Professional experience and expertise can be the compass that steers a financial ship through turbulent waters.
Unfortunately, reaching the milestone of retirement does not free investors from market volatility, which is a constant companion. However, armed with a diversified portfolio, patience and professional advice, investors can transform the rollercoaster ride into a smoother journey toward the retirement they’ve always dreamed of.
Remember, it’s not about predicting the market’s every move but about having a resilient strategy that withstands the ups and downs, ensuring peace of mind as retirees enjoy the fruits of their lifelong labour.
