{"id":1149,"date":"2012-03-19T17:00:38","date_gmt":"2012-03-19T07:00:38","guid":{"rendered":"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/?p=1149"},"modified":"2012-03-20T15:38:50","modified_gmt":"2012-03-20T05:38:50","slug":"super-bonds","status":"publish","type":"post","link":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/blog\/2012\/03\/super-bonds\/","title":{"rendered":"Should more super be invested in bonds?"},"content":{"rendered":"<p><strong><a rel=\"attachment wp-att-1155\" href=\"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/blog\/2012\/03\/super-bonds\/john-piggott_resized\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-1155\" src=\"http:\/\/blogs.unsw.edu.au\/knowledgetoday\/files\/2012\/03\/John-Piggott_resized.jpg\" alt=\"\" width=\"70\" height=\"70\" \/><\/a><\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Professor John Piggott<\/strong><\/p>\n<p>Should superannuation portfolio allocations be adjusted with age to reduce the financial exposure of senior Australians to stock-market crashes?<\/p>\n<p>Certainly, I feel it is essential to take age and wealth into account in deciding on an individual\u2019s asset allocations, including the government-mandated low-cost MySuper.<\/p>\n<p>The architect of the federal government\u2019s superannuation reforms, \u00adJeremy Cooper, has commented today that stock-market crashes indicate fund managers should invest more in bonds, particularly for members nearing retirement who have less time to recoup losses. He highlights the way baby boomers that were just about to enter retirement lost a lot of wealth during the 2008-09 stock market crash, when the ASX\u2009200 fell about 50 per cent.<\/p>\n<p>I agree. Australian superannuation is constituted to a very unusual design and we rely very heavily on self-funded or privately funded superannuation to provide retirement income, much more heavily than most other countries. We need to be especially aware of the connection between an individual\u2019s circumstances and the portfolio he has in his superannuation fund, and make portfolio allocation as flexible as possible.<\/p>\n<p>Australia is one of many countries that have a rapidly ageing population. However there are few products that provide longevity insurance, which is protection against the risk of individuals living too long, running out of cash and then relying on the state.<\/p>\n<p>We also need to have more superannuation products.<\/p>\n<p>It is probably best early on in life for savers to invest in the stock market \u2013 they can ride out the natural peaks and troughs, and gain the benefits of a long term investment. However later on, when workers are approaching retirement, they really need to put their assets in a less volatile investment, such as bonds. If a default system is to be introduced on a mandatory basis then there should be <em>multiple<\/em> defaults determined by an individual\u2019s age and wealth.<\/p>\n<p><em>John Piggott is the Director of the ARC Centre of Excellence in Population Ageing Research at the Australian School of Business.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 \u00a0 \u00a0 Professor John Piggott Should superannuation portfolio allocations be adjusted with age to reduce the financial exposure of senior Australians to stock-market crashes? Certainly, I feel it is essential to take age and wealth into account in deciding on an individual\u2019s asset allocations, including the government-mandated low-cost MySuper. The architect of the federal [&hellip;]<\/p>\n","protected":false},"author":336,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1149","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/users\/336"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/comments?post=1149"}],"version-history":[{"count":12,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1149\/revisions"}],"predecessor-version":[{"id":1165,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/posts\/1149\/revisions\/1165"}],"wp:attachment":[{"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/media?parent=1149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/categories?post=1149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.unsw.edu.au\/BTOpinion\/wp-json\/wp\/v2\/tags?post=1149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}