News: Latest News: Don't Panic!

Article Date: January 23, 2008

To read recent newspapers reports and articles one would think that the financial sky is falling in. So should Prime Super members worry?

The answer quite simply is a resounding NO!!!

We have seen it all before, - the boom followed by the correction.  
These market movements occur in cycles and, although the timing is not predictable, they are as regular as night follows day.

This particular correction has been anticipated for some time now and has been brought on by the so called “sub-prime mortgage crisis” in the US but if it hadn’t been this that precipitated the flood of nervous investors dumping stock it would have been something else.

Why people panic and dump stock has been the subject of a number of studies but nobody really knows what prompts such a “herd mentality”. Some, such as those who have borrowed to purchase shares, may have good cause to dump them as the banks call up “margin loans” but this is not the case for your superannuation invested with Prime Super.

Historically the Australian Share Price has shown a steady upward movement for more than 100 years. (We draw your attention to the graph in the brochure “Investments within Prime Super” – under “Forms and Publications” above).

So what have we at Prime done to mitigate the situation for our members?

• Acting on the advice of Access Capital Advisors, one of the most respected investment consultants in Australia, we have invested in sound investments that will stand the test of time;
• We have diversified our investment portfolio so that our “eggs” are in a variety of different “baskets” thus spreading the risk;
• To protect our members from panic selling we have imposed a cooling off period on transfers between investments and on benefit payments (other than those resulting from death, disablement or financial hardship claims). The cooling off period will be from today until the unnecessary panic works its way out of the financial system. It will be reviewed regularly.

IMPORTANTLY you should be mindful that any loss in your account balance is merely a “paper loss” until it is realised by a benefit payment or by a change in investments.

We urge members to sit tight and wait until the storm passes – History show that it undoubtedly will!

Disclaimer
This notice provides general information only and may not be relied on as legal or financial advice. Prime Super (ABN 60 562 335 823) is a Regulated Superannuation Fund issued by Farm Plan Limited (ABN 81 067 241 016, AFSL 219723). A Product Disclosure Statement can be obtained from the issuer and should be considered before deciding whether to acquire, hold or dispose of an interest in Prime Super.