Investing in share markets means from time to time your superannuation balance will go down instead of up.
Your first instinct might be to switch into a more conservative investment option – like cash – to avoid further losses. Unfortunately, this strategy could leave you worse off than if you had simply waited out the downturn.
Let’s break down why it pays to ride out the swings and roundabouts of the market.
What drives share markets?
Share markets rise and fall based on many different factors, including the health of the economy, global conflict and interest rate decisions. More recently, share prices have been affected by US tariffs and escalating trade tensions, against a backdrop of inflation and geopolitical conflicts.
The chart below shows how global share markets have performed over the past 25 years. Although there have been several short-term market downturns during this period, it’s also clear that overall asset values have grown.
Global share markets have seen many ups and downs in the past 25 years
Source: MSCI World Index. Chart shows the aggregate performance (in US dollars) of share markets in developed economies over the 25 years to 1 April 2025.
Things to consider before you switch options
So what does all this mean? Should you switch investment options in search of a better outcome?
To help answer the question, let’s look at what happened during the COVID crash of 2020.
According to a study by Griffith University and financial services company IRESS, the number of Australians switching their super investment option tripled during the pandemic.1
For some, these switches did help to protect their savings from the worst of the downturn. But in more than 50% of cases, people who switched into a new investment option were left financially worse off than if they’d done nothing at all.
The study also found that people who moved their super into cash when the market was falling missed out on gains when the market rebounded.
If you decide to switch your investment options during a market downturn, the next decision you'll have to make is when to switch it back, which comes with its own risks. In other words, that’s two decisions you’ll need to time perfectly. And trying to ‘time the market’ can be as random as flipping a coin – getting the result you want usually comes down to luck.
Super is a long-term investment
When there's volatility in the market, often the best thing to do is nothing. It’s important to remember that super is a long-term investment, which gives funds like Hostplus time to recover from short-term downturns.
Our investment strategy has delivered excellent long-term results for our members through the following factors.
Diversification
We don’t just invest in share markets. Instead, we invest our members’ money across many different assets including bonds, cash, property, infrastructure, private credit, and more. This means that a bad day on the market will typically only affect part of your portfolio, helping to preserve your savings.
Active management
Our fund managers can make changes to our holdings as market conditions change. Sometimes this might be to protect against possible losses, other times it might be to take advantage of an upcoming opportunity. In either case, this active approach aims to deliver superior returns over the long term.
Scale
As one of Australia’s largest super funds, Hostplus can invest in large unlisted projects that smaller funds don’t have access to. This gives us more ways to diversify our portfolio and generate returns for you.
Our default Balanced (MySuper) option is a top performer over the long term2, which speaks for itself. And we’re proud to have you with us at Hostplus.
Finding the right investment option
Need help choosing an investment option? Read more on the factors you might need to consider. Or, explore our educational videos.
We also offer members a range of financial advice tools to help you make appropriate investment choices. Whether you choose the convenience of a phone appointment, opt for a more personal approach with a face-to-face consultation, or want to do it yourself with SuperSmart, our innovative online advice tool, we have financial advice and planning options to suit your needs.
Contact us on 1300 303 188, email us, or book a callback today.
The information in this article is correct as at time of publication.
1. Griffith University and IRESS, The wrong end of the switch, 2021
2. Hostplus Balanced (MySuper) investment option compared to the SuperRatings Accumulation Fund Crediting Rate Survey – SR Balanced (60–76) Index at 31 December 2025. Past performance is not a reliable indicator of future performance.