In uncertain markets, a cautious approach may be wise— yet acting too quickly or too late can lock in losses and compromise long-term returns, say UNSW experts.

Superannuation Myths: What’ s Fact and What’ s Fear?

As global markets fluctuate in response to escalating geopolitical tensions— such as renewed tariff threats disrupting trade and supply chains— Australians are increasingly questioning common assumptions about their superannuation strategies.

With over $ 4 trillion invested, Australia’ s superannuation system is deeply intertwined with global market performance. Recent volatility has reignited debate over how closely Australians should monitor their super— and what actions, if any, they should take during market turbulence.

Should you shift to cash when the market dips? Is it safe to ignore super

until later in life? Are self-managed super funds( SMSFs) actually safer than traditional funds?

Associate Professor Mark Humphery- Jenner( School of Banking and Finance) and Associate Professor Anthony Asher( School of Risk and Actuarial Studies) unpack six prevalent superannuation myths and what Australians should consider in today’ s shifting investment landscape.

Myth 1: Stock Markets Always Recover

Many Australians trust that stock markets will inevitably rebound and outperform other investments, particularly bonds. However, A / Prof. Asher warns that this assumption may not hold in future decades.

“ Recent research suggests it’ s unlikely the coming decades will match past performance,” he says, citing an oversupply of savings relative to investment opportunities in Australia and globally.

A / Prof. Humphery-Jenner adds,“ Markets do tend to trend upward, but some can remain depressed for extended periods. Japan is a case in point— it took decades to recover its 1990s highs. Diversification is crucial because no one can predict which markets will underperform or outperform.”

Myth 2: Adopt a Conservative

Strategy When Markets Are Volatile

While a defensive shift may seem prudent during volatility, A / Prof. Humphery-Jenner cautions against hasty decisions.

“ Switching allocations too quickly may lock in losses and cause investors to miss out on the rebound,” he says.“ Market timing is notoriously difficult.”

A / Prof. Asher adds that older individuals closer to retirement should consider more conservative strategies but also emphasises the complexity of investing and the value of professional advice. Myth 3: SMSFs Are Safer Despite their flexibility, SMSFs carry notable risks.“ They are not inherently safer,” says A / Prof. Asher.“ They are more susceptible to fraud and require substantial knowledge in accounting and investment.”

While SMSFs can work for disciplined, experienced investors, A / Prof. Humphery- Jenner stresses that they must be managed actively.“ They require informed decision-making and discipline to avoid pitfalls like high fees or poor stock picking.” Myth 4: Superannuation Can Wait

Until You’ re Older Younger Australians often assume they can delay thinking about super, but the benefits of compounding make early engagement vital.

“ Super grows over time— starting early makes a massive difference,” says A / Prof. Humphery-Jenner. He also highlights government schemes such as the First Home Super Saver Scheme and the value of in-fund insurance.

A / Prof. Asher advises choosing a low-cost, well-performing fund early on, emphasising that everyone will eventually depend on their super.

Myth 5: You’ re Stuck with Your Employer’ s Super Fund

Contrary to popular belief, Australians can choose their own super fund.“ Your employer’ s default is just a suggestion,” says A / Prof. Humphery-Jenner.“ You can move your super, but weigh up the costs and avoid chasing past performance.”

He recommends choosing a fund based on personal financial goals, risk tolerance, and investment structure. Myth 6: Annuities Offer Poor Value Lifetime annuities are often misunderstood, says A / Prof. Asher.“ They’ re not about losing money when you die— they ensure a steady income for life.”

He explains that annuities can provide a higher standard of living compared to account-based pensions with the same investments and can serve as financial insurance, even benefitting children by reducing the likelihood of needing to support parents in old age.