[Smart Investing] How to manage short-term market volatility

Investments and personal finance insights from Vanguard Australia

11 March 2020 Hi everyone, What a week it has been. We continue to see volatility both at home and globally with the ASX hitting bear market territory briefly before recovering. We will likely see more ups and downs for the foreseeable future but Vanguard continues to urge investors to tune out the noise where possible and to "stay the course". For some, "doing nothing" might feel like a passive decision but it would do well to recognise that not reacting to market volatility is an active decision and possibly the right decision towards reaching a long-term financial goal. This week, Vanguard's Financial Writer Tony Kaye writes about the three mistakes to avoid during a downturn and discusses the use of minimum volatility factor funds in a portfolio strategy. We look at how investment decisions during the last market downturn in December 2018 resulted in different outcomes and finally, Vanguard's Head of Intermediary Distribution Rebecca Pope reminds us why advice matters in times like these. As always, feel free to email us with your questions or feedback. Regards, Robin Bowerman Head of Corporate Affairs Vanguard Australia

How to manage short-term market volatility By Tony Kaye It's been a wild ride for investors in recent weeks, with daily markets volatility at levels not seen since the GFC. Here are some mistake to avoid during a downturn and an investment approach to consider. Read more

Tune out the market noise By Robin Bowerman What do you do when market volatility increases, share values begin to fluctuate, and media coverage intensifies? Focus on the investing factors that you can control. Read more

Why financial advice matters By Rebecca Pope Like a good personal trainer, a good financial adviser should put your interests first. They should be keen to understand your circumstances and your goals, and be predisposed to work with you to achieve your objectives. Read more

Vanguard in the news How the global fossil fuel divestment push is testing Australia's resolve The Age/Sydney Morning Herald | Charlotte Grieve | 7 March 2020 As the global fossil fuel divestment push gathers momentum, Australia's financial sector is being forced to re-evaluate its support for fossil fuels. But for an economy heavily dependent on resource extraction, this is no easy feat. Index provider Vanguard recently launched two index fund options that broadly exclude companies in the fossil fuel industry, and so far, more than $1 billion has flowed into these products from both institutional and retail clients. The two indices – one tracking international shares, the other tracking bonds – have provided competitive returns to its mainstream alternatives, with lower fees, says Vanguard's head of product Evan Reedman. To read more, please visit the SMH website. Please note the link above will show a copy of the article (where freely available), or the publisher's website if a subscription is required.

In case you missed it Falling yields. Understanding the rush to fixed income. By Tony Kaye It's important for investors to recognise the diversification role of having bonds in a portfolio – ideally through a blended fixed income fund that invests across a wide range of individual bond issues. Read more ETFs for income By Robin Bowerman The growth in the popularity of ETFs has significantly increased the options for investors looking to access different ways to invest for yield. Read more

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