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Market volatility: how it can affect your super

View important information about modelling calculations and assumptions in this video

When you look at your superannuation balance, you may notice that it goes up and down more often at certain times, and wonder why this is happening.

Your superannuation balance represents the value of the assets your retirement savings are invested in. This could be shares, property, cash, or something else. These different types of assets all behave differently, depending on what’s going on in financial markets.

For example, if your super balance is mostly invested in the Australian share market, you’ll see it rise when the share market goes up. And if shares go down, your super probably will too.

This is totally normal. And while you want your super to mostly go up over your working life, there will be times when it loses money.

Sometimes, it may go up and down more frequently over a short space of time. This is called ‘market volatility‘, which is usually driven by big economic or policy changes. Examples include:

  • The Global Financial Crisis of 2007/2008
  • COVID-19 pandemic of 2020 and interest rate hikes

Because super funds are investors in share markets, your investments are affected by these movements.

What causes market volatility?

The list of factors that can affect stock market trends and volatility is nearly endless.

There are many day-to-day factors that can cause stock market jitters, like a company releasing a report showing its earnings weren’t as high as anticipated, or a well-known analyst or CEO making a prediction on X (formerly known as Twitter).

And of course, more significant events around the world are felt by share markets. Recently, rising inflation and geopolitical conflicts mean investors are feeling pessimistic, and share prices are reflecting that.

Should I be concerned about market volatility?

Volatility is a normal, short-term term part of the investment cycle. And your super is a long-term investment. History shows us that the market has recovered from many big declines over time.

Depending on the reason, recovery can take as little as a few months – such as COVID-19 – to a few years – like the Global Financial Crisis. As super is a long-term investment, these timeframes for recovery are easily absorbed when your balance has decades of time in which to grow.

Upside to volatility

One upside to volatility when markets are falling is that stocks will cost less to purchase. So, while your balance may stall or go backwards in the short term, it is an opportunity for us to buy up assets, essentially at a discount, and make money off them in the future.

We’re here to help

We know falling share markets can be stressful, especially if you’re close to retiring. At First Super, we’ve been delivering strong long-term returns for a long time, through all sorts of market changes. Our 10-year return to 30 June 2023 for our Balanced accumulation option is 7.83%.1

If you still have concerns about your super investments, or you’re planning to switch the way you’re invested, we’d encourage you to speak with us first.

Contact us by phone or email, and we’ll put you in touch with the right person to help you, whether it’s our Member Services Team, our Financial Planning Team,2 or one of our regional Coordinators.3 Remember, you can get advice on your First Super investment options at no additional cost as it’s included in your membership fees.


1Past returns are not an indicator of future returns.

2Member and Employer Services Coordinators can provide factual information and general advice only.

3First Super financial planners are authorised representatives of Industry Fund Services Limited (ABN 54 007 016 195, AFSL 232514).

Issued by First Super Pty Limited (ABN 42 053 498 472, AFSL 223988) as Trustee of First Super (ABN 56 286 625 181). This publication contains general advice only and does not consider your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and read the Product Disclosure Statement (PDS) before making any decisions. You can obtain a PDS by calling 1300 360 988 or visiting firstsuper.com.au/pds. Target Market Determination (TMD) is available at firstsuper.com.au/tmd.