“That is the importance of getting advice. If you are strongly educated around that stuff, there may be some concern around what is happening on the markets now, but you understand you are playing the long-game, not the short game, and history dictates that these sorts of things recover over time and then go ahead in leaps and bounds in different parts of the market.”

While some people may be thinking they have extra liquidity or cash in their funds to buy some of the discounted stocks, others may be thinking of selling, but any decisions being considered should come back to the fundamental principles of having a clear investment strategy and vision.

Dunn said SMSFs are a much more mature sector, particularly from retirement phase, meaning while there are inflows there is an equal amount of outflows because of the number of post-retirement individuals within the SMSF landscape.

Research from the ASFA found that the SMSF sector is more likely to invest in the domestic market, unlike APRA-regulated funds, which deploy 60-70 cents of every new dollar of superannuation capital offshore, as funds seek to counter concentration risk in Australia.

“SMSFs are more inclined to invest domestically than overseas, and a lot of that goes back to things like Commonwealth Bank or Telstra shares. CommSec even called it the ‘mum and dad index’,” Dunn said.

“SMSFs tend to invest more in those blue chip stocks and there is a much higher concentration in domestic stocks. And there has been a higher trajectory of new SMSFs being established over the past few years, so the question then is where that money is being invested.”

However, Dunn said there is also the increased exposure to ETFs in SMSFs, and while they tend to invest in the ASX, ETFs have given self-managed funds more international exposure.

“There may be a bit of cushioning [from the stock market falls], but the market will still be exposed to this. To what extent, however, is subject to a fund’s investment strategy and portfolio,” he said.

“When you look at APRA funds and industry funds, they are more inclined to have accumulators and consistency in inflows, so you would see a need to continually top up money into the market. And these funds have a lot more younger people with much higher risk tolerance.”

He continued that the alarm regarding the super sector presently is two-fold.

“There is the nervousness around the cyber breach and hacking that has impacted the big funds, as well as what is happening in the market, and people are wondering if their money is safe.”

“Like we saw with the GFC and COVID, [we will have to wait and see] how much markets are impacted, especially with things like a fund’s ability for cash flow, ongoing payments, dividends, profitability, and franking credits. People will have to see how much their balance is corrected by.

“A lot of what is happening is reactive, and people are trying to figure out whether they should be in or out, but more broadly, we should also be thinking about the impact later on – whether there will be enough cash in the account to pay the minimum pension. People in retirement will be asking these questions, but at this point we need to roll with the punches until we get a better understanding of where things are at and how it will impact the global economy.”