How To Protect Your Super When Markets Get Shaky

Your super balance drops in a fortnight and suddenly every headline feels louder. We sit with that gut-level anxiety and break down what’s actually happening when markets wobble, whether it’s conflict-driven fear, tech disruption, or the messy overlap of both. Then we slow the whole thing down and rebuild the decision-making from first principles: markets fall sometimes, recoveries can arrive quickly, and your time horizon matters more than today’s number on the screen. 

We talk practical investor strategy for market volatility without pretending there’s one perfect move. We walk through what a “balanced” portfolio tends to experience versus an all-shares approach, why diversification across cash, term deposits, bonds and other defensive assets can soften the ride, and how an all-weather portfolio is designed to behave when things go bad. If you’re using a super fund option, we explain what you’re relying on the fund to do. If you’re advised, we outline what your adviser should already have built in. 

From there we lay out three clear pathways when you feel uneasy: hold tight with quality holdings, reduce risk by selling the weakest positions in stages, or upgrade portfolio quality while staying invested. A caller shares a smarter way to review performance across 12 months and five years, plus how dollar cost averaging can turn volatility into a calmer contribution plan. We also cover sequencing risk for people approaching retirement, and finish with a crucial superannuation question about nominated beneficiaries, estates, and the tax treatment of death benefits. 

If this helped you think more clearly about your next move, subscribe, share it with a mate who’s stressing about their super, and leave a review. What’s the one rule you wish you’d learned earlier about investing through market shocks?

DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you’re confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser. Access The Rask Group's Financial Services Guide (FSG): https://www.rask.com.au/fsg

Transcript

Welcome To On The Money

SPEAKER_00 0:00

The Talk Investing podcast and blog discusses investment advice from our previous podcasts and radio shows by Remo Greco and Marco Melado. Learn all things around retirement and investing.

SPEAKER_03 0:25

On the money.

SPEAKER_04 0:27

Oh, you're looking at your superannuation or your investment portfolio, and it's a seesaw, isn't it? Because we've had Iran, then talks of AI and the kickback against software companies. Superannuation specialist Marco Mulato is here to help us really with some investor strategy during something like a shock. 1-300-222-774-0437-774-774. Anything we share here is general in nature. Doesn't take into account your personal circumstances, financial situations, or needs. Good morning, Marco.

SPEAKER_02 1:00

Hello, Lisa. Nice to be here.

SPEAKER_04 1:02

What is happening to our portfolios

What’s Driving The Dip

SPEAKER_04 1:04

at the moment? Please describe.

SPEAKER_02 1:06

Right. Well, uh, they're going down. We know that, and that's happened in the last couple of weeks, really since the conflict started. Are they down heavily? Uh not if you looked at, you know, the general normal sort of balanced portfolio that most people would have. They wouldn't see too much damage. They might see three or four or five percent lower balances than where we were a couple of weeks ago. If you were all shares, so now we're talking a about a portfolio that doesn't have any other types of assets that can can help buffer some of the some of the hit, you're down a bit more. You're down probably six or seven percent or so in a couple of weeks. That's a fair bit in only a couple of weeks. So you can't blame people for feeling a little bit antsy about that. What you're hearing doesn't help around the conflict. And then, of course, we've got this other theme going on at the same time, which is AI is eating business models and software that were traditionally thought of as the original disruptors, and so you've got these two big themes hitting markets at the moment, and that's really rattling balances.

SPEAKER_04 2:17

So, what do we do when we're watching our portfolio decline in value? I feel like you want to react. You want to respond.

SPEAKER_02 2:27

That's the normal instinct I think that most people will have. And as humans, we tend to see something and want to react to it to try

Investing Basics During Shocks

SPEAKER_02 2:35

and fix it. So is it the right course of action? It depends. So I think let's go back a bit to what fundamentals of investing are. And so the first thing I think you need to be very, very aware of and accepting of is that if you're going to be an investor in investment markets, there are absolutely going to be periods where your balance goes down. There are going to be periods where prices decline for a variety of reasons, and so you have to be accepting of that. The second thing is look at your time frame. If you're an investor for the next six weeks or 12 months, we might have a problem, sure. But if you're an investor in superannuation, really your timeline is your entire life. It's not even just up to the point of retirement, it's your entire life that you'll be invested for. So you're going to see a lot of these declines over time. So don't take them too seriously at the beginning, because they may be over before you know it. Some declines happen really, really quickly, and then the recoveries happen really, really quickly. So I'm not sure we want to knee-jerk React immediately. And then I think probably the most important fundamental part of building a portfolio is you should try and have a portfolio from the very beginning that doesn't have just assets like shares that can go down. You need to have lots of different types of assets that can help you in periods where markets are going down, like cash, term deposits that everybody knows, corporate bonds, government bonds, private debt. These things don't go down when shares go down necessarily.

SPEAKER_04 4:08

Aaron Powell And if we're talking a portfolio that sits within our superannuation, do we trust our superannuation person who does these things to actually do this balancing for us? So obviously spreading it.

SPEAKER_02 4:19

So there'll be uh I I guess there's two ways to look at that. Number one, you either don't have an advisor and therefore you're in an option, and what you're doing is you're hoping that that super fund does it for you and has the right allocations in the right sectors, and if they're doing their job properly, properly, you should be relatively okay because they're going to have lots of different types of investments. If you are advised and have an advisor, your advisor has done this. They've already built the portfolio expecting things to go bad, and you know, we we we call it an all-weather portfolio, right? So whether things are good or bad, the portfolio that we have built should go through those periods in a way that we expect them to behave. So we shouldn't really get any nasty surprises. So if you're advised, you definitely should be

Diversify Or Trust Your Fund

SPEAKER_02 5:10

okay. If you're not advised, you're really hoping your super fund has done it for you and they're doing a good job.

SPEAKER_04 5:15

Uh a text here on 0437-774-774. You're with Lisa Leong and Marco Mulado, our superannuation specialist, and we're doing on the money, and we're talking about how to think strategically in times of um well, conflict, things that might shock you, like um a bit of a fall due to AI. So this texter, I just looked at my portfolio. It's dropped $3,000 since I checked it last weekend. So when you're sort of looking at these things and just thinking, oh my gosh, that was $3,000 I had in my hand. I don't have it in my hand anymore. Um, you're saying just try and hold firm.

SPEAKER_02 5:57

So how do we think about that? So we talked about the fundamentals. Let's talk about now, I guess, some things that you could do if you wanted to. And I think generally there are maybe three pathways that you could look at. The first is do nothing. And so doing nothing is a perfectly valid strategy. Hopefully, the portfolio you have is already uh or has already been built with good quality investments. They're not going to disappear, they're not going to go bankrupt, they're not going to fail. So one of the strategies you could employ is look, I think for the moment what I own is pretty good. I'm going to sit tight and wait for the recovery. Recoveries always come. We just don't know when and we don't know how quickly. So that's one strategy. The other two pathways you could take,

Three Paths: Hold Sell Upgrade

SPEAKER_02 6:45

if you're really worried, and you just want less exposure to this worry, you want a bit of peace of mind, you want to take some risk off the table, then you can look at your portfolio and start to sell some of the weakest holdings. And now how do you do that? You look at things that just haven't performed even before the crisis, not just in the last two weeks, but maybe the last 12 or 18 months. They're not performing very well, or they're going backwards, or there's lots of negative sentiment around that particular investment. You want to start selling those initially. Maybe sell a third of the portfolio, and that'll take some risk off the table. And then in another five or six weeks, you review that, you might sell another third. You put that money into cash or term deposits or something really similar. Does give you then a second problem though. You've got to know when you want to rebuy those assets. So you're now making having to make two tough decisions. I don't think we're there yet in this in this conflict. And then the other quite very simple thing you could do is just improve the quality of your portfolio. So that means selling your weakest holdings, replacing them, not necessarily going to cash or income securities, but replacing them with other shares that you just know are better quality. And they're generally going to be your big blue chips that everybody talks about. So the 20 or 30 largest companies in the country. So there's some strategies you can think about.

SPEAKER_04 8:03

18 past ten, excuse me. You're on On the Money, and we are talking about uh investor fundamentals when the market is shaky. And Danny has called in on 1-300-322-774. G'day, Danny, what have you seen in your portfolio?

SPEAKER_03 8:21

Yeah, well, I do keep an eye on my portfolio regularly in my um my super account, and uh I I used to overreact to it and and get a little bit nervous. But now, and particularly listening to your program and the feedback that you give on the market. Um, instead of looking at the last week, I look back at the last 12 months and then the last five years. And and if I'm considering the ATX 200 as a bit of a guide, and I know it's not the be all and end all, um, if I look back and see, you know, way back in time, you know, I've gone gradually up on the graph. Regardless of

Dollar Cost Averaging In Practice

SPEAKER_03 8:55

the shorter adjustments in the meantime, I just started putting, and I don't have a lot of money to contribute, so I just started putting $1,000 in it last week, uh personal contribution. And I'll put another thousand in this week because this is probably the time I feel best to contribute rather than when it's it's peaked.

SPEAKER_04 9:13

Oh, okay. Marco, thoughts on Danny from Dalesford.

SPEAKER_02 9:17

Sounding pretty wise. So there's a lot in this. So yeah, so first of all, I think we pick up from Danny that he has a long-term view, so he doesn't get rattled by short-term market movements, and he looks at things over a longer period of time. So he's not looking at the last two weeks or month, he's looking at the last 12, 18, 24 months. And we do know that markets trend. There's lots of academic research in this area. Markets generally trend over nine or twelve month periods. So, first of all, long-term view, don't get caught up in what is happening in the last couple of weeks. Number two is if you have the confidence, add to your portfolio. Because prices are lower today than they were two weeks ago. Can they go lower? Sure. But they're already lower than where you were two weeks ago. So if you have the confidence and you have a list of investments that you've been wanting to buy, you can start to just drip a bit of money in. And what he's doing, what Danny's doing, is dollar cost averaging. That is not putting everything in all at once and getting one price on one day. He's putting a bit in now, he'll put a bit more in in two or three weeks, he'll put a bit more in in a few months, and that way you get to average your way into the market, and it just removes being unlucky and getting all in on one day, where perhaps in the following couple of weeks prices go even lower.

SPEAKER_04 10:39

There you go. Danny, how does that feel?

SPEAKER_03 10:42

Oh, 100%. Makes me feel pretty confident and uh at least more relaxed. But um, yeah, thanks for your advice. It's been really helpful. I can give you that.

SPEAKER_04 10:52

Oh, thank you, Danny. Um now we've got this one. Uh Paul from Mount Beauty says, you know what? It's only a real loss if you actually sell.

SPEAKER_02 11:02

Okay, great statement. Great statement. So a lot a lot of people don't think of it this way, but uh I hate to use the term paper losses because they're still losses. You're looking at your balance and it's lower. But it really is only a crystallized loss if you sell it and then don't reinvest or go and use the money for something else. If you hold, it can recover. If you sell it and buy something else, it can recover.

Retiring Soon And Sequencing Risk

SPEAKER_02 11:30

So it's only really a loss once you've sold it and you're not going to redeploy that money.

SPEAKER_04 11:35

1022 right now, if you just joined us. Welcome. Lisa Leon here with superannuation specialist Marco Millardo. We're on 774 ABC Melbourne and ABC Victoria. And we are talking about our markets being a little dramatic at the moment and what sort of strategy can you use? This is a good question from this text, Marco. I've just retired. I have industry super. My portfolio is high risk. Shall I dial it back to lower risk or sit it out?

SPEAKER_02 12:05

Oh, this is a really big question. So it's uh, you know, we'd spend an hour with this particular person talking through investment history, risk tolerance levels, time frame, comfort levels. So it's uh we can't unpack it all in one question. But as some general comments, we would say as you're approaching retirement, it's even more important to get the balance of your investments right because there's something called sequencing risk which happens. And that is if we have a significant market decline just before we retire, we then retire, we're no longer contributing to our superannuation, we're needing to start an income stream with it. We're starting with a lower balance, and so that can definitely impact the first four, five, or six years of your retirement. So the important thing is before you retire, make sure you get your structure right. So and that may mean you're not high risk.

Beneficiaries Estate And Death Tax

SPEAKER_02 13:05

That may mean we dial that back a little bit just as a bit of a protective measure, and then you can ris revisit that over time.

SPEAKER_04 13:13

And Keith is here from Berlin on 1 300 2774. Good morning, Keith.

SPEAKER_01 13:19

Good morning, Lisa and Marco. Uh my my question's a little bit off topic, uh, but uh it's in relation to nominated beneficiaries on a super fund. I understand if to nominate adult non-dependent children that when the payment is made, it is subject to 17.5% tax. My question to is it possible to nominate your estate as the beneficiary? And when the payment is made, disperse it via the wills rather than uh a straight payment from uh from the tax from the superfund?

SPEAKER_02 14:01

Fantastic question. And we get this a lot. So you are right, if your super fund balance is going to non-dependent adult children, there's a tax on not all of your balance necessarily, but the part that's called uh taxable component, so you'll find that in your statement. That tax is 17%. So that is made up of 15% as the tax plus two percent Medicare levy. That's if it goes directly to the adult children. What you're describing is possible, so you instead of it going directly to the adult children, you can direct it to your estate. So instead of writing your kids' names in the beneficiary form, you would write estate or legal personal representative sometimes is in there. It then goes into your estate. It doesn't avoid the original 15% tax, though, unfortunately, because it's where the money ends up that counts. So it's not going to stay in the estate forever, it will eventually get to the kids. The tax office will know that that will incur the 15% tax, but you won't pay the two percent Medicare levy because the estate is not a human being. So we shouldn't have to pay the Medicare levy. So you save 2%, but you won't be able to get your way out of the 15%, unfortunately. The only way you could do that is if you actually withdrew all your balance before you passed away and then it went to

Key Takeaways And Goodbye

SPEAKER_02 15:35

the kids.

SPEAKER_04 15:36

All right. Thank you so much for your call, Keith. And thank you, Marco Mulato, for coming in for our superannuation. And we will continue the conversation when you come back another Sunday.

SPEAKER_02 15:47

Thanks, Lisa.