Super funds should ensure their members understand the importance of a long term investment strategy when the inevitable market correction occurs, SuperRatings managing director Jeff Bresnahan has warned.
"The trick for the funds is to ensure that when a correction occurs, members understand that holding their long term investment strategy is crucial," he said.
He said members should realise that timing the market is best left to the experts.
"Those who jumped out of a balanced option into a cash option in January 2002 due to falling markets have effectively found themselves some 26 per cent behind the position they would have been had they stayed put over the last five years," Bresnahan said.
With the government's new legislation effectively providing a cradle to grave scenario for superannuants, people must learn that a long term strategy involves both good and bad years, Bresnahan said.
Hopefully, people are taking sound advice rather than just throwing money into the system, he said.
SuperRatings last week released its report on the performance of superannuation funds for the 12 months to February 2007.
Industry fund Westcheme topped the table (16.5 per cent) followed by MTAA Super (16.3 per cent) and masterfund Legg Mason Corporate Super MT - Balanced Trust (16.1 per cent). The performance was based on the balanced investment options.
