It’s funny how you never hear people talk about their superannuation until there’s some good old-fashioned volatility in the markets. Unfortunately, it’s normally not things which I find encouraging to hear.

See, some people get the idea that when the share market is crashing, it’s then a good time to convert the capital in their super funds from ASX shares to cash or fixed-interest investments. You know, so they ‘don’t lose any more’.

This is a terrible idea and a terrible way to treat your retirement savings. Here’s why.

When people start realising the share market is ‘crashing’, it’s normally after the markets have already lost a healthy chunk of their value, say 10-15%.

By the time they convert their shares to cash within their super fund, it might be at 20%. So you’re selling your assets at a 20% discount and going to cash, locking in a substantial loss.

People usually decide to go back to shares when the markets are recovering, too. Some of the best days of positive returns in the share market often come after days of heavy selling. So it’s highly likely that anyone who is trying to convert their cash back into shares will miss most of these days.

What’s really happening is losses are being locked in, and gains locked out. It’s an awful way to invest.

What should you do with your super if there’s a market crash?

Well, if you’re more than 10 years away from retirement, either do nothing or add more cash! You have plenty of time to ride out any future crashes and benefit from buying more shares when they’re on sale. Playing around with your super fund when there’s volatility in the markets will not help your retirement fund at all.

If you’re nearing retirement and wish to be a little more conservative with your capital, the time to put this in motion is when times are good, not in the middle of a market crash. Yes, this will take a small amount of foresight and might involve giving up some potential gains. But that’s the price of reducing volatility – there’s not really a free lunch here.

So have a think about what you would do if the markets fell 15% next week. Hopefully, the answer is nothing but if it isn’t, make a plan now so you don’t have to when it’s too late!

More reading

• ASX 200 drops 1.7%, Xero reports a profit
• 3 top ASX 200 shares every investor should buy
• ASX small-cap sector rallies strongly during April
• Got $5,000 to spend? Here are 5 ASX shares you can buy today
• Goldman Sachs names 5 reasons iron ore prices won’t crash

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) fell by 1.7% today in another red day for the Australian share market.

Australia’s unemployment numbers were revealed today with the economy losing 594,300 jobs. Youth unemployment and the number of hours worked also showed a painful decline.

These job numbers are probably why the ASX 200 lost quite a bit of ground over the last two hours of trading.

There were some individual highlights within the ASX 200:

Xero Limited (ASX: XRO)

The Xero share price fell around 4.7% today after the ASX 200 accounting software business released its FY20 report to investors.

Operating revenue grew by 30% to NZ$718.2 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) went up 88% to NZ$137.7 million. Free cash flow grew 320% to NZ$27.1 million and Xero generated a net profit of NZ$3.3 million.

Total subscribers grew by 26% to close to 2.3 million. UK subscribers increased by another 32% to 613,000.

Xero warned that trading in the early stages of FY21 has been impacted by the coronavirus environment.

Charter Hall Group (ASX: CHC) 

The share price of the ASX 200 property group business rose by 4.25% after giving a market update.

Charter Hall reaffirmed its FY20 earnings guidance for approximately 40% operating earnings per security growth compared to FY19.

At 30 April 2020 it had $39.2 billion of funds under management (FUM) and a development pipeline of $7.3 billion. So far during the year it has seen FUM growth of $8.8 billion.  

Breville Group Ltd (ASX: BRG)

The share price of Breville jumped 6.7% higher today after reacting to a trading update and the capital raising. The share price of the ASX 200 business was up more than 10% earlier today.

Breville has already completed a $94 million institutional placement with significant support from existing investors.

In the trading update Breville said that it delivered 32% revenue growth for the period from 1 January 2020 to 30 April 2020. Revenue growth in March was 25% and in April was 21%. The gross margin in January to April 2020 was consistent with the first half of 2020.

Despite the good performance, the ASX 200 company has moved to manage cashflow and reduce cash expenses.

Returns as of 7/4/2020

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More reading

• Got $5,000 to spend? Here are 5 ASX shares you can buy today
• ASX fundie says ASX 200 was more volatile in March than during the GFC
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
• Why I’d buy and hold Telstra shares for a decade
• How to invest $1,000 like Warren Buffett today

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The S&P/ASX 200 Index (ASX: XJO) is full of top shares that would be good additions for almost any portfolio.

ASX 200 shares are large enough to be fairly robust (compared to small caps). And outside of the ASX 20, I think there are many ASX 200 shares that have good growth potential despite the coronavirus.

Here are three of those ideas:

Service Stream Limited (ASX: SSM)

Service Stream is involved in designing, building, maintaining and operating network infrastructure. The networks it’s involved with include telecommunications, electricity, gas, water and ‘new energy’.

Underlying profit and the dividend have continued to grow attractively over the last few years and utilities will continue to be important during this period and beyond.

I think it could provide an attractive combination of dividends and earnings growth over the coming decade compared to most ASX 200 shares.

Altium Limited (ASX: ALU) 

I think Altium is one of the highest-quality shares in the ASX 200. It has very efficient, focused management that are steering the company towards achieving a global market leading position by 2025.

The electronic PCB software business has been a solid performer year after year. It’s facing short-term impacts from the coronavirus which is causing prices to fall and probably the margin too. But for the long-term I think it’s better to continue winning new clients so that after the coronavirus it has a large group of new, sticky clients that will pay full price fees year after year. It’s still aiming for 100,00 Altium Designer subscribers by 2025. 

The cloud offering of Altium 365 is an imperative part of winning over new clients. It’s why Altium is investing heavily in Altium 365 for an even better experience. 

Altium has a very solid balance sheet. In the recent update it said that it had US$77 million of cash.

I’d love to buy more Altium shares for my portfolio, but I’m waiting for a cheaper share price.

Brickworks Limited (ASX: BKW)

Brickworks is an ASX 200 share stalwart. It has been listed on the ASX for decades and it hasn’t decreased its dividend for over forty years. That’s a great record in my opinion.

In the short-term I don’t think most investors are giving enough weight to the quality and value of its non-construction assets. If the industrial property trust was valued by the market like 50% partner Goodman Group (ASX: GMG) is, Brickworks would have a higher share price. Brickworks’ investment division also provides very defensive earnings and dividends.

Things do look tough on the construction side of things in 2020. But it won’t be like this forever. Australia and the US will continue to need building products in the future, even if it takes 12 months (or more) to recover. But Brickworks is a great business which will recover quickly once orders start coming in.

It also current offers a grossed-up dividend yield of 6.4%. I think it could be one of the best ASX 200 dividend shares.

Time to buy these ASX 2oo shares?

I think all three of these shares look like good long-term ideas to me. I’m waiting for a better share price to buy Altium shares, but Brickworks could be a great long-term buy today. 

More reading

• ASX shares I’d invest $10,000 into today
• How to build good wealth with small investments
• Top brokers name 3 ASX 200 shares to buy right now
• Revealed: 5 dividend shares for reliable income
• Is the Altium share price a buy?

Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Service Stream Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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