David Koch has urged Australians not to panic as global markets fall, sharing a simple plan to help households manage the uncertainty.
Stocks have dropped in recent weeks amid escalating conflict in the Middle East, adding pressure to superannuation balances and household budgets already affected by rising living costs.
“The three-point plan is don’t panic,” the financial expert said, particularly when it comes to superannuation.
Investment experts say market falls during times of conflict and uncertainty are not unusual and often recover over time. One of the world’s largest investment firms, Vanguard, has previously found markets typically stabilise after periods of volatility.
“Investing, particularly as it relates to superannuation, is a marathon, not a sprint,” Vanguard Australia’s Daniel Shrimski said.
Koch said moving superannuation into cash during a downturn could leave people worse off in the long run.
“If you’d gone to cash during COVID, your superannuation return would be 50 per cent less than if you’d just stuck in there,” he said.
His second tip was to review everyday spending and household bills, with potential savings often available for people willing to compare prices.
“Go through every single major bill that you’ve got to see whether you’re getting the best deal,” Koch advised, including mortgages.
The warning comes as economists continue to watch interest rates closely. The Reserve Bank of Australia is expected by some analysts to deliver another cash rate increase in May.
Koch’s final piece of advice focused on family support during difficult financial periods.
“Talk to each other as a family to make sure you’re approaching this as a team,” he said.
