I think that it would have been hard to miss the recent headlines about the "Greek Tragedy", "Grexit" and then the fall in the Chinese share market index. I write this having been (like you) a sideline watcher. However, I want to touch base and to let you know that you're not alone.
What does this news mean?
There is no doubt that the recent headlines contribute somewhat to higher volatility in share markets. We know that share markets are volatile anyway, they do not go in one direction forever - in fact asset prices generally do not head in one direction forever.
We have been aware of the Greek situation for sometime, however no one really was able to call the outcome and we still don't really know. It is a sobering call that getting into too much debt can have real repercussions; as an individual (as in the 2008 Global Financial Crisis) or even as a country.
Did you know that the Chinese stock market had more than doubled over the previous 12 months? That didn't really make the news until the market started to correct (i.e. fall!). It's still currently substantially ahead over the past year.
Given that both these news events are quite specific, they both impact small parts of a well diversified portfolio of assets. It's further evidence of the power of diversification. What we do not know is if there will be contagion and if there is - what the impact of any contagion would be.
So, while I am not suggesting that what is happening around the world is not important, I am saying that investing has risks and that it is your time horizon that is really important. Volatility is the constant. If it's not these stories then it will be others.
We all suffer from differing levels of fear when investing. Here's an article from the internet that you may like to read that suggests asking yourself, what are you really afraid of and replacing that fear with knowledge.
Having said that - if you are feeling at all concerned about the impact that the recent events may have on your superannuation investments then maybe it's time to check your level of risk - please contact us to discuss and review where you are at - because that is what we are here for; to work with you to achieve your goals.
Learn more about how we can help you secure your financial future
Like us on Facebook