"Should my financial adviser have been cashing out shares in my super portfolio this year, prior to the current crash? Allowing a buy back in now at a lower price? I am retired and honestly shocked no trading has occurred on my account. It seems a lost opportunity."
-Question from Lisa in South Australia
Top answer provided by:
Mark Candy
Hi Lisa,
This is a very valid question and one that many retirees are grappling with, particularly during volatile market conditions. The idea of selling high and buying back in at lower prices seems logical on the surface, and in hindsight, it can appear to be a missed opportunity when no action has been taken. However, the reality of managing a retirement portfolio is more complex and depends heavily on your personal financial goals, investment/risk tolerance, and the principles guiding your adviser’s investment philosophy for you/with you.
Firstly, it's important to understand that timing the market – selling before a drop and re-entering at the bottom – is exceptionally difficult to do consistently, even for professional investors and investment managers. Most advisers, me included, follow a disciplined, long-term investment strategy designed to withstand market fluctuations. If your portfolio is well-diversified and aligned to your investment/risk profile, it may have been structured to ride out short-term volatility rather than make speculative short-term trades.
Since you are retired, your adviser may also have designed your portfolio around providing steady income and preserving capital, rather than aggressively chasing market movements. This often means maintaining a mix of assets—like fixed interest, cash, and equities—to provide both stability and growth over time. In such strategies, it is common for advisers to rebalance periodically, but not necessarily to make large timing-based trades, unless a fundamental change in your situation or the markets warrants it. Remember too, that every time you buy and/or sell assets, you will be incurring transaction costs and may be triggering capital gains and/or capital losses.
That said, your concern about missed opportunities is fair. If market indicators were pointing to overvaluation or instability earlier in the year, one might reasonably expect some adjustments made to your allocation—perhaps increasing cash holdings and your defensive asset positions via government or investment grade corporate bonds or reducing equity exposure.
As an example, in the advice firm that I work for, we began adding further diversification to client’s portfolios mid to late last year, banked some profits, and increased defensive allocations early this year, in anticipation that this calendar year would not be producing the strong investment returns, that we all benefited from in 2024.
If you feel blindsided by the lack of action, it may be time to have a candid conversation with your adviser. Ask about the rationale behind the current strategy, how often they review market conditions and your portfolio, and what thresholds might trigger a change in asset allocation. You are entitled to feel confident that your adviser is acting in your best interest with both foresight and responsiveness.
Finally, investing is not just about reacting to short-term market moves. It’s about aligning your money and income requirements with your long-term retirement needs. However, clear communication and an adaptable strategy are essential.
While your adviser may have valid reasons for staying the course, your concern about missed rebalancing opportunities is worth discussing with them. It is your future—and you deserve to feel informed, prepared, and confident in the guidance you are receiving.
In summary, if history has taught us anything, it is that the share market will eventually bottom out and then turn around. Market falls are never fun, and fear can be one of the biggest threats to investors’ long-term returns. When this happens, we need to continue to focus on the fundamentals and the main investment principles that guide all of us.
It is worthwhile keeping these things in mind:
- Share market falls/pullbacks are to be expected.
- Stay diversified – quality portfolios have been designed to provide a blend of Australian and international assets, allocated to growth and defensive investment options, to weather the ups and downs of the market, over the long term.
- It is not about trying to ‘time the market,’ but rather ‘time in the market’ supporting a long-term investment strategy.
- Selling assets after a fall, locks in the losses.
- Even during market adjustments, your investments continue to generate dividends and distributions, reinvest at lower prices where relevant, and take advantage of ‘compounding.’
- To minimise the emotional ‘roller coaster ride,’ turn down the noise, take a break from watching the markets, listening to the news, and checking your portfolio continuously.
Enjoy your retirement,
Mark
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