SMSF investors urged not to panic over markets
While the attacks in Paris saw some short-term volatility in global markets, Instreet and AMP Capital have urged investors to remain calm, given that any impact would now be priced into share markets.
Speaking to SMSF Adviser, Instreet managing director George Lucas said the impact on shares and other investments would be minimal since markets were actually closed when the initial reports came out.
“We now have a much clearer picture of the extent of what happened in Paris, and the markets have pretty much all taken it in their stride,” said Mr Lucas.
“There will be limited impact on the economic performance of France, or Europe as a whole, with this one-off attack, so there should be limited impact on the market.”
AMP Capital's head of investment strategy and chief economist, Shane Oliver, said while the events in Paris are a terrible reminder of the terror threat posed to countries participating in the efforts to combat IS, previous experiences of terrorist attacks show they only have a short-term impact on markets.
“There is no doubt that the attacks in Paris will contribute to short-term investor nervousness but the experience with various Al Qaida-related attacks last decade is worth recalling: after an initial negative impact, share markets bounced back as it was clear that there would not be a major economic impact,” said Mr Oliver.
“It only took just over a month for the US share market to recover from its 12 per cent post 9/11 slump and it took the UK share market one day to bounce back from its 1.4 per cent fall on the day of the July 2005 London bombings.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.