Issue 30: Share market volatility, what’s driving it and is now the time to adjust your SMSF’s investment strategy?

Alternative investmentsDiversificationFixed Interest and BondsInvestingNewsPortfolio Construction

Issue 30: Share market volatility, what’s driving it and is now the time to adjust your SMSF’s investment strategy?

In last month’s article – ‘What will 2022 bring for your SMSF?’, we looked at what may be on the cards for this coming year. No predictions, just a number of observations at a high level.

On our list was share market volatility and a range of potential drivers that could see it continue following some significant swings towards the end of January. One of these drivers was the potential return of inflation leading to interest rate rises.

Inflation has been a discussion point for a little while and many had expected it to occur, but what possibly galvanised the market’s recent reactions was the US CPI number for January – 7.5%; the highest in 40 years. This did send markets into a spin in the US and to some extent in Australia and the prospect of higher inflation continues to drive volatility.

Keeping this in context, the inflation rate in Australia is nowhere near that of the US,
and is currently sitting just above the mid-point of the RBAs benchmark of between 2%-3%.

But, and there is often a ‘but’… many will already be feeling the impact of the rising cost of fuel, energy, some grocery items and fresh food; just walk past the butcher’s window!

Sorry, this content is reserved for members of our SMSF Connect community.

Please register for a free community account to view this content or login below.


If you are an existing member of SMSF Connect, please login below.

If you wish to learn more about joining the community, please click here.

Join the free community

Complete the form below to set up your free account and be regularly updated on SMSF and investing news and information.

  • Strength indicator

Missed an Issue? Catch up on all articles from the SMSF Connect Investment Series below:

Disclaimer: The information contained in this document is provided for educational purposes only, is general in nature and is prepared without taking into account particular objective, financial circumstances, legal and tax issues and needs. The information provided in this article is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to your individual circumstances. While SMSF Association believes that the information provided in this article is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001.

Ian Irvine - Guest Contributor

Ian has been a keen investor for over 40 years and can draw on his experiences from both investing on his own behalf and also having worked in financial services for more than 30 years. Over this time, he has seen many changes that impact investors’ attitudes to in what and how they invest.

He started his career in what is now referred to as fast moving consumer goods (FMCG) or grocery, working for an Australian margarine manufacturer. In 1986, he was recruited to Westpac around the time of deregulation of the sector, where he spent 10 years before taking a role at AMP and then with ASX for 14 years up to the end of 2017. He continues to be involved with ASX; working on their educational programs.

In 1996, he and his wife established their own SMSF and again the experience and lessons learned regarding managing an SMSF over the years have provided him with many insights and ideas. He enjoys sharing these with others where these are helpful and always suggest that if an investor or SMSF trustee is unsure, that they should seek appropriate advice from a licenced professional.

Ian holds a B. Com (UNSW), and lives in Sydney and enjoys travelling to and meeting investors and SMSF trustee at the educational events with which he has involvement with from time to time.