I am making pre-tax salary contributions to my super. Is it worth continuing these in the current unstable market shares tanking?

Yes, it is. Let me elaborate.

Dollar-cost averaging is a well-known investment principle. This involves investing the same amount of money at regular intervals over a certain period of time, regardless of price.

The benefits include reducing the impact of market timing, mitigating emotional investing and encouraging disciplined saving. It can also help lower the overall cost basis of an investment and potentially minimise losses during market downturns. 

It helps you with the saying “buy low and sell high”. Well, with the buy low part anyway.

For example, let’s say you invest $100 every month and the unit price of the investment is $1. You get 100 units. But if markets are down and the units are worth only $0.80, you get 125 units for that month. You are buying more at a cheaper price.

Of course, this works only if the unit price goes back up again. We don’t know when that will be, but I’m confident over a long period this will be the case.

Your employer super guarantee contributions is another form of dollar-cost averaging into the market.

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