If you tend to keep a close eye on your superannuation or investments, you have no doubt noticed the significant market pullback since the beginning of the year, with many markets experiencing their steepest declines since the Covid-19 sell off in 2020.
This volatility is being driven by several factors including geopolitical tensions between Russia and Ukraine, Omicron and a pandemic driven supply chain crisis. However, one of the key contributors for the fall, is the expectation of rising inflation. The Federal Reserve has changed its tune and has clearly indicated a rise in interest rates is imminent. This also raises the alarm bells for interest rate rises domestically, with many commentators signalling rises later in the year.
This sort of market reaction is typical in an environment like this. The extraordinary growth experienced over the last 18 months has led to record highs across many assets, which are now unravelling as they become less desirable as interest rates rise.
As always, we are proactively managing your portfolios in a diversified manner, to ensure they remain protected and to cushion the decline. We are also keeping a close eye on any market opportunities that may present, to take advantage of well-priced, discounted assets.
It is always important during times like this to remain calm, block out the noise and understand the long-term nature of your investments.
If you have any concerns or would like to chat, please do not hesitate to give us a call.
