Investors are always cautioned to be prepared for so-called Black Swan events – events so rare they take everyone by surprise. It is fair to say nobody anticipated what 2020 had in store.
Just as we were recovering from catastrophic bushfires and drought, the COVID-19 Black Swan circled the globe. By the end of the year, 85 million people had been infected and 1.85 million had died.
And yet… As we look back over the year that was, challenges remain but Australia has shaken off its first recession in 28 years, global shares were at or near record highs by December and superannuation funds are firmly back in positive territory.
According to Chant West, the median growth fund, which typically holds 61% to 80% in shares and other growth assets, was on track to finish the year to December up around 3%. That’s a massive turnaround following global sharemarket falls in the range of 35% in February and March. It’s also a reminder of the importance of staying the course and holding your nerve during short-term market shocks.
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