Bright side for super funds
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September 20, 2008 12:00am
AUSTRALIANS watching their super nest eggs erode in value have been told to look on the bright side as funds make the most of bargains.
Superannuation funds posted average losses of 6.5 per cent last year, and fund investments continue to fall in value.
But the Association of Superannuation Funds of Australia said there was a silver lining to the stock market collapse.
"What super funds are doing is using the cash that comes in via the SGC (superannuation guarantee contributions) to buy some of these stocks, so it is great for super," ASFA chief Pauline Vamos said.
"There is money coming into the funds. When you have cash, you are able to buy. If you speak to a lot of analysts they are saying, 'We are buying at prices we haven't seen in years'. So, if you've got cash, it's a real opportunity."
The Australian stock market lost $28.5 billion in value this week, as the global financial crisis caused a major rout of key shares that made up many superannuation portfolios.
Ms Vamos said it was impossible to predict the market, but advised investors to think of the long term.
"Don't make any rash decisions, because if you get out of the market today, you're getting out at some of the lowest prices," she said.
The Australian Institute of Superannuation Fund Trustees said the dramatic movement in the share market, which fell about 2.4 per cent over the week, had hit super returns hard.
But AIST chief executive Fiona Reynolds said the average return for super fund members over 10 years would still be about 9 per cent.
"While its unsettling for everyone to witness such falls in the short term, history shows us that markets bounce back," she said.
Prime Minister Kevin Rudd said investors should look to the fundamental strength of the Australian economy.
"You look at what's happened with stock markets in response to the global financial crisis and they have gone down, and gone down a lot," Mr Rudd said.
"And that directly affects people's superannuation . . . What I am saying, however, is that there is a strong, credible, robust economic strategy to see Australia through."
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In this a Democratic country, "Australia" where voting is compulsory. We have the the hard left and the hard right stallwarts. Then we have those between the above. The undecided, who cannot make up there minds. These are the ones that can be swayed by spin, rhetoric and false promises, by would be future Prime ministers. So those that fall for this rhetoric, spin and false promises. The undecided who cannot make up there minds, the easily swayed. Are in fact the ones who choose who runs this country.
Posted by: WONDERING of DUDD 3:25pm today
If you believe that your a fool ,no one can stop this slide its simply too big ,get every bit of money you have and head for the hills ,or better still the perth mint and buy gold ,this will be a long rough ride ,on top of that when labor brings in its green scam tax it will be a lot worse than this and as they said themselves ,3 million jobs will go ,good luck people thats what you get when you believe in fairy stories ,one would have thought people would be a wake up to labor, after the labor nsw debarkle ",but mabey they just like pain" .
Posted by: truthman of 2:58pm today
yeah ,go again boys,why not it's only play money and at the end of the day ,you will still b employed ,just tell the people to hang for long time ..what a joke that no one is accountable ,just say thats the way things went ,we as experts did not hear or see it coming .Question : r these people applying commission in this terrible times?u have heard about the bottomless pit,well if u read through that article that's exactly what's been said .Answer,buy commercial property, gross up the repayments for 5 years or 10 year what ever suit your position and do the sums and most important u have something to sell @ the end of the day,and u control the moves,now that's not that hard,is it? ok talk later ,down the track ....
Posted by: tommy from carlton of carlton 9:29am today
Greed and spin, greed and spin. The cycle goes on. Any comment from KDudd makes me cringe now.
Posted by: Helen Trask of Pearcedale 8:54am today
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