I received year end statements for my super fund and as expected there was a huge drop in my fund balance. Though it was kind of expected, it was still a shock. According to reports released by research house, SuperRatings, the median balanced fund delivered a negative 6 and 7 per cent.

The median balanced fund is the default fund for anyone who fails to nominate a super fund. These figures are far from impressive - and definitely not something we need in the midst of rising petrol prices and food prices…Your super figures could be better or slightly worse than the median balanced fund figures. But whatever the figures, here are some of the reasons why you should not panic:

1. Super is a long term investment (over 30 to 35 years)- You should not be worried about short term performance. 2. Share market can’t have positive returns all the time. The markets had good four years - 15.7 per cent in ‘06-07, 14.5 per cent in ‘05-06, 12.9 per cent in ‘04-05 and 13.2 per cent in ‘03-04.

3. The share market had its worst financial year performance since 1982 - down by about 15 per cent of its value.

4. In a market like this, however good your fund manager, it is hard to get positive returns.

Don’t let this year’s return alone force you to switch funds. There are entry costs and exit costs and all this will eat into your super profits. This also does not mean you should straightaway make changes to the asset allocation of the fund (moving from one fund type to another). To reinforce - Superannuation is a long term investment and short term volatility should not dictate your strategy. Whatever you decide to do, make sure you seek financial advice.

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