Super to record biggest losses in 20 years

18/06/08
Super to record biggest losses in 20 years

Default balanced option superannuation accounts will record their worst full year result since 1987 according to SuperRatings and Mercer. Falls in Australian and international equities markets are expected to result in investment returns of about minus 5.2 per cent. SuperRatings said it was doubtful whether any fund would post a positive result by June 30. Fund performance is expected to range between minus 2 per cent and minus 13 per cent. This year's performance is dragging down the benchmark five-year results of the funds down 0.5 per cent this financial year to 10.8 per cent.

Source: The Australian Financial Review

 

I'll go.

If anyone is overly concerned that the expected return of Australia equities is -5.2% - the largest in the last 20 years, should take merit in the fact that the expected return of -5.2% is the largest in the last 20 years (you might have to read that twice to make sense of it).

A return of -5.2% placed onto the below chart does not make investing in Australian equities any less compelling.

ImageShack - Hosting :: returnssince1900on1.jpg

In fact, another point that can be made with the above chart is that the ups are bigger than the downs and there are more ups than downs.

James

 

with market returns 20%PA over the last 4-5 years, are we going to cry over -5%?

 

I agree i'ts not a big deal.
Hopefully things won't get any worse.
Cheers