STAY THE COURSE

Unfortunately, global craziness seems to be the new normal. We are fortunate to be tucked very far away from it all, but that means we end up on our phones following events as they unfold and it is easy to start feeling overwhelmed.

To make matters somewhat worse, we may then start reading about financial markets, with volatility almost always aligning with conflict and uncertainty. The media will try to sell you fear, but you know not to fall into that trap.

Last month it was interest rates and inflation. Now the focus has shifted again. With the tragic events unfolding in the Middle East, oil prices have risen sharply and become very volatile. When oil prices jump around, it often raises concerns about inflation sticking around for longer than expected. Financial markets tend not to like uncertainty, so this kind of environment makes them jumpy. Again, this is all normal and you’ve heard us talk about this before. It’s important we remind you now and again.

Markets react to global events. They react to economic news. They react to uncertainty. Volatility is simply part of the deal when investing in growth assets.

If we take a short-term view, most super accounts are going up, down and sideways all in a day's work. If we take a slightly longer view, super funds continue to do very well. They have recorded double-digit returns on growth-focused funds for several years in a row now.

As we’ve said before, the media want you to focus on the last 24 hours. We want you to focus on the last twenty-four years, and much more importantly, we want you to focus on the next twenty-four years.

We need to make sure we can see the forest for the trees… the big picture! And when we do that, like illustrated below, all long-term returns point North East.

So, as we always say, stay focused on your objectives, and to quote John Bogle, Vanguard’s founder, we want you to stay the course!

Cheers,
Dan and Dave