When Australian shares reach record highs, it’s a natural to wonder what you should do next.
Should you invest more? Take profits? Change your super investment option? Or leave everything alone?
A strong market can be good news for investors and super balances, but a record high on its own is not a reason to change your strategy. What it can be is a useful prompt to check whether your investments still look the way you intended.
As markets rise, your portfolio can change without you making a single trade. Shares that perform strongly can become a larger proportion of your wealth, your risk exposure can shift, and the investment option inside your super may no longer reflect your current stage of life.
The better question is not “is the market too high?”
It’s: do my investments and super still suit where I am going?"
An ASX record high does not automatically mean you should buy, sell or switch investments.
Strong market performance can change your asset allocation and overall level of risk.
Diversification matters across markets, sectors and asset classes.
Your super investment option affects how your retirement savings are invested.
A portfolio review should start with your goals, timeframe and circumstances rather than short term market performance.
When the ASX reaches a record high, it means a major Australian share market index has reached its highest recorded level.
It sounds significant, but it does not tell you what markets will do next.
Markets may continue rising, move sideways or fall.
That is why making investment decisions based only on whether the market looks “high” can be difficult.
ASIC's Moneysmart guidance on choosing investments recommends considering your financial goals, investment timeframe and risk tolerance when choosing investments.
In other words, the market headline matters less than whether your strategy still fits you.
This is one of the most useful checks to make after a strong market run.
Imagine your intended portfolio includes Australian shares, international shares, property, fixed interest and cash.
If Australian shares rise faster than other investments, they can gradually become a larger proportion of your portfolio.
You have not actively changed your strategy, but the market has changed it for you.
This is known as portfolio drift.
Moneysmart's diversification guidance explains that different investments move at different rates over time, which can change your original asset mix.
That matters because your asset allocation influences how much risk you’re taking.
A practical review might include checking:
Then compare your current position with the mix you originally intended to hold.
If it looks very different, it may be worth understanding why.
You can also read Is your financial plan built for uncertainty? for more on keeping your broader strategy aligned when markets change.
Diversification is not simply owning lots of investments.
You could own shares in several Australian companies and still have significant exposure to the same market or a small number of industries.
The same applies to ETFs.
Search interest around ETF investments is rising in Australia, but an ETF is not automatically diversified just because it holds multiple investments. Its underlying holdings still matter.
ETFs can provide exposure to a broad range of companies, markets or asset classes, but it’s important to understand what they actually hold.
The more useful question is: What am I actually exposed to?
This is where the market story becomes more relevant to many Australians.
Super funds invest across assets that may include Australian shares, international shares, property, infrastructure, fixed interest and cash.
When share markets perform strongly, you may see that reflected in your super balance depending on your investment option.
But a higher balance is only one part of the picture.
Your super investment option determines how your retirement savings are invested and how much market risk you’re taking.
According to Moneysmart's super investment options guidance, funds commonly offer options such as growth, balanced and conservative, alongside single asset or specialised options.
Different options can have very different levels of exposure to growth assets such as shares.
Instead of asking whether your super performed well while the ASX rose, ask whether the way it’s invested still fits your life.
Start with four questions:
How long until you expect to access your super?
Someone with decades until retirement may view market volatility differently from someone approaching retirement.
How comfortable are you with investment risk?
Higher exposure to growth assets can mean greater short term movement in your balance.
What does your super actually hold?
Do not rely only on labels such as “balanced” or “growth”. Look at the underlying asset allocation.
When did you last review it?
Your income, family, goals, assets and retirement plans can change while your investment option stays the same.
We explore this further in Your super may be growing. But is your strategy still right?.
Not necessarily.
A record high can make selling feel attractive because you may want to lock in gains. It can also make investing new money feel uncomfortable because you may worry you have missed the opportunity.
Neither feeling tells you what markets will do next.
Instead, consider whether something meaningful has changed in your circumstances.
That might include:
your investment timeframe becoming shorter
approaching retirement
a major income change
receiving an inheritance
selling a property or business
your tolerance for risk changing
your portfolio becoming heavily concentrated
your financial goals changing
If nothing has changed except the market headline, a major strategy change may not be necessary.
You do not need to predict whether the ASX will rise or fall next.
Use the milestone as a checkpoint.
Check your asset allocation: Compare your current portfolio with the mix you intended to hold.
Check your diversification: Look across markets, sectors, companies and asset classes.
Look inside your super: Review your current investment option and its underlying mix.
Revisit your timeframe: Consider when you expect to need the money and how much volatility you’re comfortable with.
Review rather than react: A review does not automatically mean something has to change.
Investments rarely exist in isolation. Your super, direct investments, cash flow, debt, tax position and retirement plans can all influence the strategy that may be appropriate for you.
A PictureWealth adviser can help you review your investment mix, understand what you hold inside and outside super, assess your risk profile and consider whether your current strategy still aligns with your goals.
The aim is not to chase the latest market winner. It’s to understand whether your money is positioned for what you’re trying to achieve.
If the ASX record high has prompted you to review your investments or super, speak with the PictureWealth team.
An ASX record high alone does not tell you whether it’s the right time to invest. Consider your goals, timeframe, risk tolerance, diversification and broader financial position.
Should I sell shares when the ASX reaches a record high?
Not necessarily. A record high does not predict what markets will do next. Consider why you hold the investment and whether your circumstances have changed.
What are ETF investments?
An ETF is a fund traded on an exchange such as the ASX. It can provide exposure to a range of companies, markets or asset classes through one investment.
What are common super investment options in Australia?
Super funds commonly offer growth, balanced, conservative, cash and specialised investment options. The underlying asset allocation determines the level of investment risk.
How do I know if my super investment option is right for me?
Consider your timeframe, goals, comfort with risk and broader financial circumstances. It’s also important to understand the assets held within your investment option.
Should I change my super investment option when shares rise?
Not automatically. A rising share market alone is not a reason to switch. Review whether your current option still reflects your retirement goals, timeframe and risk tolerance.
Seeing the ASX reach a record high can create excitement or uncertainty, but investing is not about responding to every market milestone.
Check your portfolio. Understand your exposure. Review your super. Revisit your goals.
And if you’re not sure whether everything still fits together, that is a useful conversation to have with your adviser.
Important information
This information is general in nature and does not take into account your objectives, financial situation or needs. Consider whether the information is appropriate for your circumstances and seek professional financial advice before making financial decisions. Past performance is not a reliable indicator of future performance.