Cost of investor panic bites hard

THE cost of panicking when financial markets crash is being laid bare for superannuation fund members and investors.

A new analysis by Aware Super has found a typical fund member who switched to cash when shares collapsed in March 2020 is now 33 per cent worse off than if they had ridden out the storm.

And thousands of its members who switched to the safety of cash during the Covid crash still had not switched back, with an average 45-year-old fund member losing up to $30,000 in retirement savings.

It’s a timely message as stockmarkets wobble amid worries over China, the US and energy shortages.

Aware Super group executive advice Sarah Forman said members of all super funds switched from higher-risk investments in 2020.

AMP Capital head of investment strategy Shane Oliver said if investors panicked and sold out, it took them about a year to invest again.

He said there was no easy way to recoup losses