There has been a noticeable change in the investment environment recently. The initial reaction to Trump’s election was positive, presumably with investors believing that the pro-growth policy in his first term would be broadly replicated. However, since his inauguration (20 January), the implementation of growth negative and inflation boosting policies in a relatively chaotic manner have weighed on most equity markets. Since the inauguration, US equity markets have fallen, particularly the riskier indices (e.g. the NASDAQ). The Australian equity market has also fallen.
US consumer confidence and business confidence have fallen sharply since January, and inflation pressures have risen. The new US policy mix has created an environment which encourages consumers and businesses to be more cautious in their decision making. This has had an impact on equity markets, with the S&P 500 falling around 10% since its recent peak.
While the current policy shock increases the chance that the US experiences a recession, most analysts are anticipating reasonable economic growth in 2025. At the time of writing (24 March), share markets have partially recovered, but volatility remains above average. We expect that volatility over the near term will remain greater than normal.
Investment advice
We understand that the recent falls in equity markets may be disconcerting. At these times, it is important to keep in mind that your superannuation is a long-term investment and falls in equity markets will occur from time to time. Sometimes, the biggest gains in share markets come soon after a fall. If you are thinking about making any changes to how your super is invested, we recommend that you get financial advice. With Vision Super, you can receive advice at no extra* cost from a Vision Super financial planner on single topics relating to your Vision Super account, to help develop a strategy tailored for you.
To book an appointment with a Vision Super financial planner, complete the online form or call the Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 6pm). If you need more complex advice and fees apply, they will be discussed with you before any work is done.
*Multiple statements of advice in a financial year may incur an additional advice fee. The financial planner would disclose applicable fees before providing any advice.
