A downturn in the market is always an anxious time for investors. However, history has repeatedly demonstrated that these downturns come and go and markets generally rebound over time.

The savvy investor will watch the downturns knowing very well that negative returns are normal every few years, but remain focused on his or her long term objectives. 

The following guidelines aim to help you stay focused on your long term objectives during a downturn.

1. Avoid making reactive decisions to short term events.
   Markets tend to rise and fall, so, every few years, there will be a period of negative returns during a fall.  If investors react during a short term downturn in the market by moving their money to another plan, they risk losing the benefits later on when the markets recover.  Try to ignore short term events in the market that impact your investment negatively.
2. Look at history - markets have generally recovered.
   Look back at events of the past few decades that have had an enormous impact on the market - the sharemarket crash in 1987, the Gulf War, the Asian economic crisis and market collapse, the terrorist attacks in the US and many more.
   
   Markets suffered directly following these events as investors became nervous about the impact, however, markets subsequently recovered. 
3. Stay with your long term objectives.
   Focus on your investment objectives rather than focusing on the short term events in the market.  Reacting to market events may not suit your long term investment objectives and it is your long term objectives that are important to your goal of building enough super to finance your retirement years.  
   
   To set long term objectives:
   1. Calculate your investment horizon. For example if you are 25 years of age and retire at 60 years of age, you will have about 35 years until you retire, which means you have a 35 year investment horizon.
   2. Assess the level of risk you are comfortable with when investing. Generally, the longer your investment horizon, the greater the risk you can take. Growth assets like shares and property are considered high risk investments as they yield high returns but also suffer greater fluctuations in the market. On the other hand, defensive assets like cash and fixed interest are considered low risk investments as the fluctuations are minimal; however, the returns are lower. To help you assess your risk profile, please visit the risk profiler section  under Calculators & Tools. 
   3. Choose an appropriate investment plan for you. Your decision needs to take into consideration your investment horizon and level of risk. For a list of GESB's investment plans, visit the Take Control of your Super section.
   4. Stick to your long term objectives. Try to ignore the fluctuations in the market as fluctuations are a normal part of an investment cycle.
4. Get professional advice.
   If you're building a house or making some important arrangements, it makes sense to get advice to maximise the saving and success of the final outcome. It's the same with your nest-egg. Building it on your own may not be the smartest choice when a qualified adviser can help you understand the best approach to maximise the outcome.
   
   Many underestimate the value of good advice. You may pay a fee for this advice but you could save thousands of dollars as a result of getting that advice.  A qualified adviser will guide you through a series of steps to demonstrate all of the options available to you, and the positive and negative consequences of each. You and your family should then be in a good position to make well-informed decisions to suit your long term objectives. For a qualified planner, visit the GESB Financial Advice section. 
5. Stay active with your contributions.  
   A downturn in the market should not discourage you from continuing with voluntary contributions to your super. It is important to continue to build your nest-egg so that you stay on track with your long term objectives. The opportunity during a downturn is that you invest when prices are low and benefit from the prices rise later as a result of a rebounding market.
6. Keep up to date.
   Maintaining an interest in your super before and after your employment years is part of your long term strategy.  GESB communicates with members regularly, however you can also stay informed by:
   • Regularly visiting gesb.com.au to get the latest information on super.
   • Registering with Member Online. It will take you about 2 minutes and you can access your personal information and subscribe to articles of your choice.
   • Contacting your Member Services Centre on 13 GESB. 

Disclaimer:

Past performance should not be relied on as an indication of future performance.

This information has been prepared for general information and without taking into account any particular person's investment objectives, financial situation or needs. To obtain advice for your particular circumstances, you should consult a suitably qualified adviser. This information is provided in good faith and believed by GESB to be accurate at the date of issue. However, no representation or warranty is made as to the accuracy, reliability or completeness of this information. Benefits can only be paid in accordance with the Act and Regulations. Except to the extent that statutory liability cannot be excluded, GESB accepts no liability (including liability to any person b y reason of negligence or negligent misstatement) for any loss arising as a result of any person relying on such information.