This is understandable as it's easy to be spooked by recent instability. But it's important to remember that historically members who "stay the course" with their investment strategy tend to end up with better results*.

So if you're thinking about switching, ask yourself these questions first. ^†

Could you lose out in the long run?

Switching at the wrong time could mean you miss out on gains when the market bounces back. This is known as "crystallising losses".

For example, super fund members who switched investment options during the depth of the Global Financial Crisis in 2009 would now be worse off than members who stood firm on their long-term strategy. Members who didn’t make changes saw their accounts recover after the GFC because they left their investments to recover, rather than crystallised capital losses.^{^}

How much longer will your super be invested for?

It's normal for markets to have cycles of ups and downs so consider if you have time to ride out short term bumps and make the most of gains when the market bounces back.

With Australians now expected to live into their 80s you could have years until you want to access your super investment. And even if you’re nearing retirement your savings could still be invested for another 20+ years.

So before making a switch remember super is a long-term investment, and you need a strategy that aligns with your needs.

Is the option you’re invested in right for you?

Rather than reacting to market volatility, you should consider your long-term investment objectives and the level of risk you’re comfortable taking on. We call this your "risk appetite".

If you didn't make an investment choice when you joined and you’re in the MySuper investment option you will have a lifecycle investment strategy where the level of investment risk decreases as you get older. If you’re unsure of your risk appetite you can receive advice about your investments over the phone by speaking with an Adviser from TelstraSuper Financial Planning. This type of advice won’t cost you anything extra as it’s included in your membership fees.

Are you switching with the herd?

Just because someone you know has changed their investment strategy doesn't mean it's the right plan for you.

Each person will have a different risk appetite and financial goals. Switching to the same investment options as your friends or colleagues without doing research should be avoided as it won't necessarily be right for you.

Should you be in cash as you near retirement?

We can't answer what investment option is best for you. However, once you stop working, you'll want to be able to draw an income from your savings without locking in losses when there is market volatility. One strategy that retired members can exercise is to have two to three year's worth of income payments in cash as part of the diversification in their savings. This way they can continue to draw an income even in volatile times from cash and avoid crystallising losses as would be the case if they were invested in high growth assets like shares.

Have you sought advice?

If you want to discuss your super you can speak to an Adviser from TelstraSuper Financial Planning over the phone at no additional cost.

They can work through some questions which will help determine what option you may be suited for.  You can speak with an Adviser by calling 1300 033 166 or filling out our online contact form.

* Past performance is not a reliable indicator of future performance.
† Any general advice on this website has been prepared without taking into account your objectives, financial situation or needs. Before you act on any general advice on this website, you should consider whether it is appropriate to your individual circumstances.
^ Assumes starting balance of $100,000. Source: www.investordaily.com.au/markets/42721-don-t-get-blindsided-by-volatility-superratings