Crump says the coronavirus pandemic in Australia and around the world has given people the additional time and money to consider their investing options fully.

He also likened the mood swings of the market – from the steep declines of March 2020 to the impressive recovery – to a naughty child.

“You put a naughty child in the corner and hopefully it behaves after a while,” Crump says.

“What we’ve seen in the last two years, in particular, is the naughty child has thrown a few tantrums as the impact of coronavirus occurred early in the 2020 calendar year and investors decided it was time to sell.

“But then after some consideration we realised the naughty child may not be so bad and perhaps we needed to give them some time in the sun … and it didn’t to take too long for the market to bounce back and for our naughty child to come good again.”

Crump says, like other market slumps such as the GFC, the lesson is not to make hasty decisions and to be prepared to prioritise long-term gains ahead over short term pain.

“People who made the decision to say ‘I’m out of this market because it’s a bad thing for me’, have potentially made impulsive, short-term and bad decisions because they’ve taken their money out when the markets are down and then when markets have bounced back up they’ve regretted it and got back in when the market has rebounded,” he explains.

“Unless you can get the timing right of when the market is at the top and when it’s at the bottom, you’re better off leaving your money there and letting it ride up and receive dividends along the way and see your value go up over the longer term.”

Next week we chat with BDO Superannuation Partner Shirley Shaefer about changes to superannuation rules and self-managed super funds.