MLC has cautioned investors against making irrational decisions, such as switching 100 per cent of their portfolio to cash, or changing cash products just to chase the Government’s bank deposit guarantee.
Continuing volatility in investment markets and the introduction of the Government’s guarantee on cash products from Authorised Deposit-taking Institutions (ADI) have lead some investors astray, MLC Platforms general manager Anthony Waldron said.
“The Government introduced the guarantee for ADIs to bring Australia into line with actions taken by Governments around the world, to protect the day-to-day transactional banking industry, which is critical to global economies,” Waldron said.
“It was not a reflection of the stability or security of Australia’s banking system… and it was not intended to signal that non-ADI cash products are inferior in any way.”
While timing is not certain, equity markets will recover and those investors who switch a large percentage of a portfolio to cash may miss out on the rebound when it occurs, Waldron said.
“What is important is that customers look at the stability and security of the company that is managing their investments… not just whether or not they are invested in a product that is covered by the Government’s guarantee,” he said.
Before making any investment decisions, Australians should seek advice from a qualified financial planner to ensure changes are based on a comprehensive assessment of their short and long-term needs, Waldron said.
