Market movements can feel unsettling at times, no matter where you are in your super journey, but they’re a normal part of investing.
While short-term dips in your balance can feel concerning, it’s important to keep the long‑term picture in mind. For the typical Hostplus member, that long-term horizon could be 30 years or more. Super is designed to grow over time, and periods of market decline have historically been followed by recovery. Let’s take a closer look at what’s happening and what it means for you.
What is a market decline?
A market decline is a period when investment markets fall in value. This can happen over days, weeks, or sometimes longer.
Not all declines are the same. You may hear different terms used to describe them:
- Short-term falls: smaller, more frequent movements as markets naturally move up and down.
- Corrections: large drops (usually at least 10%) that often follow periods of strong growth.
- Bear markets: more significant declines (around 20% or more) that occur over an extended period.
It usually only becomes clear what type of decline it was after it has passed.
We’ve seen several market declines in recent years, including during COVID-19 in 2020, the Russia-Ukraine conflict in 2022, and more recently in 2026 following the conflict in the Middle East.
In the Australian share market, each of these declines is classified differently. The 2020 decline was a bear market, while 2022 was a correction, and the 2026 decline can so far be classed as a short-term fall. In each case, markets have gone on to recover over time.
Why do markets decline?
Markets don’t move in a straight line. Declines can happen for many reasons, often at the same time.
Common reasons include:
- changes in economic conditions, such as slowing growth or rising interest rates
- company earnings being lower than expected
- declining investor confidence as people feel less certain about the future and become more cautious about where they invest
- global events, such as political tensions, or major policy changes that affect economies around the world.
In many cases, declines happen as markets adjust back to more sustainable levels after periods of strong growth.
Market cycles rise and fall over time
Investment markets tend to move in cycles. Over time, they usually go through periods where values rise, reach high points, fall, and then recover. Each phase can last for a different length of time – sometimes months, sometimes years. While every cycle is different, ups and downs have always been a normal part of long-term investing.
How market declines can affect your super
Your super is invested across different types of assets, such as shares, property, and infrastructure. When markets fall, the value of some of these investments can also decline.
This can lead to temporary drops in your account balance. Importantly, though, not all assets react in the same way. During a market decline, some investments may fall more sharply. Others, like cash, may be unaffected. Some investments may even increase in value. This mix of asset types, known as diversification, means the impact of a market decline can vary between different super accounts, depending on their investment mix. Diversification is a key part of how we manage members’ money at Hostplus.
Why declines are a normal part of long-term investing
Market declines can feel unsettling, but they’re one of the ways markets reset and adjust over time. Declines, recoveries, and growth all form part of the long-term investment picture.
Once you understand how market declines work, it’s easier to see them as a normal part of investing, rather than an unusual event. This can make market movements feel less alarming and help put short-term changes into perspective.
Need extra support?
If you’re feeling concerned about how market changes affect your super, we can help. Speak to a Hostplus financial adviser to better understand your options and how different investments work.