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        Market Volatility: Navigating the Financial Rollercoaster

        • Market volatility has returned, driven by economic conditions, political events, and investor sentiment.
        • Long-term investment strategies are an effective approach to navigating market fluctuations and achieving financial goals.
        • Managing emotions and tuning out market noise helps maintain discipline and focus during turbulent times.

        Market volatility has made a noticeable return, capturing the attention of investors and dominating headlines. Economic conditions, political events, and changes in investor sentiment can trigger increased volatility. Recent announcements of new tariffs and the confusion this has caused has significantly impacted market stability, from daily spikes in the Volatility Index (VIX) and single-day market drops reminiscent of the COVID-19 pandemic. Listening to the news alone can feel like a financial rollercoaster.

        Volatile markets can lead to impulsive decisions about your portfolio. While it's natural to want to act, hasty decisions are rarely wise, especially in the current uncertain macro environment where the final outcome is very much unknown. To navigate this uncertainty, we recommend a simple 3 step framework to help stay the course.

        1. Focus on the Long Term

        Economic fluctuations and market corrections are inherent aspects of investing, and historical trends indicate that markets typically rebound. It has been shown that staying committed, remaining invested with conviction in a long-term strategy that aligns with your objectives, risk tolerance, and investment horizon can be an effective approach. When market challenges and volatility arise, it's crucial to stay focused as staying invested yields rewards. Timing the market can come at great cost when not implemented through a risk-controlled manner or with the adequate skillset. Especially with larger swings - as accurately predicting when the market will sharply decline or rebound is challenging. Often time in the market has proven to be more effective than timing the market. Conviction is critical in terms of investment choices, it transforms short-term turbulence from a source of panic into a test of discipline.

        2. Press Mute on Market Noise

        Media coverage around markets is ubiquitous, with every shift or headline tempting investors to react, abandoning their financial plans or investment strategies. While it can be challenging, advisers who can tune out the noise and keep their clients focused while giving them confidence and setting realistic expectations, have been consistently rewarded. Redirecting focus from short-term outcomes to long-term strategies significantly influences how investors react to market declines. Don't get caught up in the daily noise as short-term market fluctuations often trigger emotional responses and impulsive decisions such as selling off investments or moving to cash, which can be detrimental to portfolio returns. Managing emotions and removing them from the investing equation, particularly in the short term, is crucial. After all, investing should be more about strategy than stress.

        3. Have a Plan, Trust the Process

        Studies show that asset allocation within a portfolio is widely recognised as the primary factor influencing overall portfolio returns. A robust framework, built on sound investment principles and diversified asset exposure, provides clarity and consistency, anchoring investors during uncertain times. This helps mitigate market noise, encouraging long-term investment and enables investors to stay the course.

        State Street ETF Model Portfolios

        We believe that not all portfolios are created equal - experience, discipline, and insights matter. Our range of ETF model portfolios are constructed using a strategic asset allocation framework, efficiently balancing long-term asset class returns, risk, and correlation forecasts. These portfolios can serve as core allocations for advisers aiming to maximise expected returns for a given level of risk. With a focus on the longer term, you avoid reactions to short-term noise while staying invested in asset classes with strong fundamentals and growth prospects.

        More on Model Portfolios

        Issued by State Street Global Advisors, Australia Services Limited (AFSL Number 274900, ABN 16 108 671 441) ("SSGA, ASL").  Registered office: Level 14, 420 George Street, Sydney, NSW 2000, Australia · Telephone: 612 9240-7600 · Web: www.ssga.com. 

         

        SSGA, ASL is the Responsible Entity and the issuer for the State Street Managed Funds, which are unquoted, and the SPDR® ETFs which are quoted on the AQUA market of the ASX or listed on the ASX. SSGA ASL is the AQUA Product Issuer for the CHESS Depositary Interests (or "CDIs") created over interests in the SPDR® S&P 500® ETF Trust (“SPY”) which were first quoted on the AQUA market of the ASX on 13 Oct 2014. State Street Global Advisors Trust Company (ARBN 619 273 817) is the trustee of, and the issuer of interests in, the SPDR® S&P 500® ETF Trust, an ETF registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940 and principally listed and traded on NYSE Arca, Inc. under the symbol "SPY".

         

        This material is general information only and does not take into account your individual objectives, financial situation or needs and you should consider whether it is appropriate for you. You should seek professional advice and consider the product disclosure statement, available at ssga.com, before deciding whether to acquire or continue to hold the Funds. Target Market Determinations can also be found at ssga.com.  This material should not be considered a solicitation to buy or sell a financial product or security. 

         

        Investing involves risk including the risk of loss of principal. Diversification does not ensure a profit or guarantee against loss.

         

        Risk associated with equity investing includes stock values which may fluctuate in response to the activities of individual companies and general market and economic conditions.

         

        ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. ETFs typically invest by sampling an index, holding a range of securities that, in the aggregate, approximates the full index in terms of key risk factors and other characteristics. This may cause the fund to experience tracking errors relative to performance of the index.  

         

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