MLC advises caution with cash
In volatile markets, investors are often tempted to move their investments out of the sharemarket and into ’safe havens’ like cash.
Doing so can however have two undesired effects:
- Investors crystallise their losses. If an investor sells when the value of their investments is down, they will make a loss on their investment.
- There is also often a strong rebound in equity markets after a period of poor market performance, and an investor who has left the market would miss out on this.
Anthony Waldron, General Manager of MLC Platforms said: “While we don’t know exactly when, the one thing that is certain is that equity markets will recover and start to grow again and those individuals who have remained invested will benefit from the upturn, and those who are invested elsewhere will miss out.”
Another area for caution with cash is investors pulling their funds out of cash management trusts to invest in cash products covered by the Government Guarantee
“What’s important is that customers look at the stability and security of the company that is managing their investments – whether they be invested in cash, equities, property or any other asset classes – and not just on whether or not they are invested in a product that is covered by the Government’s guarantee,” said Anthony.
MLC advises Australians to get financial advice before making any investment decisions, so any changes to their investment strategy keep them on track to achieving their long-term goals.
General Advice Warning: Any advice in this communication has been prepared without taking into account investors’ objectives, financial situation or needs. Because of this, investors should, before acting on any advice in this communication, consider whether it is appropriate to their objectives, financial situation and needs.
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