Switching to a more conservative asset like cash may seem very tempting at times like this, but by switching your investments in a volatile market you risk selling low and realising your losses and then missing opportunities for growth if the markets rebound. For example, on Tuesday 9 August the Australian sharemarket lost 5.5% in the morning trade, to then recover by 7.1% in the afternoon and finish in the black. It would be very difficult for an investor to know exactly when to sell shares in such an environment.
If you are thinking about making changes you need to consider the impact of making those changes and whether they match your investment needs and objectives.
Understanding and periodically reviewing your investment options will help you determine the most appropriate investment options for your needs and timeframes. We have designed an investor style quiz to help you understand what type of investor you are and what long-term investment choice reflects your style and risk tolerance.