Weathering Market Volatility: Staying Calm When Markets Sway

Weathering Market Volatility: Staying Calm When Markets Sway

Watching your retirement savings fluctuate can be unsettling, especially when headlines scream doom and gloom. But panicking can lock in losses and derail a well crafted plan.

It’s normal to feel anxious, but there’s a way to stay calm and protect your future.

First, understand what you own.

A balanced retirement portfolio combines growth assets like shares and property for long‑term gains with defensive assets such as cash and bonds for stability. The mix determines how much your balance rises and falls.

As growth assets outperform, your allocation can drift; review it regularly to ensure it matches your risk tolerance and spending needs. Many investors react to falling markets by switching to cash near the bottom.

This crystallises losses and means they miss the rebound that follows.

Keep an eye on your Age Pension

Payments are means‑tested, so a drop in your assets can boost your pension. Services Australia requires you to report changes to your income or assets within 14 days.

Updating your details ensures you’re paid the right amount.

Adjust your spending temporarily when markets wobble. Defer large discretionary purchases or reduce drawdowns from account‑based pensions to preserve capital.

Keep enough cash or liquid investments to cover a year or two of living expenses, so you won’t be forced to sell growth assets at a low point.

Resist the urge to cash out completely.

History shows that markets recover and missing just a handful of the best days can have a devastating impact on long‑term returns.

Over the decade to December 2024, balanced pension funds returned around 7.8% per year, while conservative capital stable funds returned 4.9%.

Staying invested in a diversified mix rewards patience.

Finally, keep a long‑term perspective.

Retirement can span decades. Choose an asset mix that balances short‑term cash and long‑term growth and rebalance when needed.

Small adjustments can preserve your wealth and your peace of mind. And remember, if markets worry you, seek professional advice.

At Face Up Life we help clients calmly navigate turbulence with confidence. We bridge the gap between complex rules and your personal goals, so you can live your retirement with peace of mind.

Book a discovery call today to stress‑test your strategy and stay calm when markets sway.

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