After a rocky start to March, the sharemarket has shown some signs of recovery. But if you’ve logged into your super account recently, you might be feeling uneasy. Jason Featherby from Leeuwin Wealth joined Doug to explain what’s happening, why you shouldn’t panic, and how to survive a sharemarket slump.

A Market Breather, Not a Crash

Markets had a strong run but have slowed in the past few weeks. “The market’s run out of steam,” Jason explained. He reassured us, “It’s certainly not a crash yet—it’s just been weak for good reason.”

Market corrections and downturns are normal. “Markets periodically take breathers,” he said. These pauses can be triggered by various factors, and right now, global tensions and tariffs play a role.

Should You Worry About a 5% Drop?

Recently, headlines reported a 5% market drop, using dramatic language like “bloodbath” or “billions wiped off.” Jason offered perspective: “The market’s worth many trillions. Billions isn’t actually that much, but it grabs attention.”

For investors, seeing red on your account can feel unsettling. Jason’s advice? “Often, the best thing is to not react. Stick to your goals. Don’t do anything you’ll regret later.”

Bull and Bear Markets: What’s the Difference?

Ever wondered about the terms bull and bear markets? Jason broke it down:

  • Bull Market: “Bulls charge,” Jason said. In bull markets, shares rise, investor confidence is high, and people feel optimistic. “Most of the time, we’re in bull markets. About 80 to 85% of the time.”
  • Bear Market: “Bears claw you down,” he explained. A bear market happens when the market drops 20% or more. Right now, we’re not there yet. “We’re halfway there,” Jason said, but he added that a deeper drop may be due after years of growth.

Correction vs. Crash: Know the Signs

Jason clarified the difference:

  • Correction: A drop of 10-20%. “We hit correction territory last week, down 10% from recent highs,” Jason shared. Corrections are common, happening every 2-3 years. “They’re healthy and normal.”
  • Crash: A drop over 20%, leading to a bear market. Crashes are rare about once every 8 to 10 years. “The last big one was the Global Financial Crisis in 2008,” Jason noted.

Should You Move Your Money?

For younger investors with diversified portfolios, Jason recommends staying put. “If you’re appropriately invested for your age, ride it out,” he said. Interestingly, downturns might even present opportunities. “If you’ve got cash, it’s a great time to think about investing.”

What’s Causing Market Jitters?

Much of the recent uncertainty comes from tariffs imposed by the US. While Australia’s direct trade with the US is limited, tariffs on China can affect us. “Heavy tariffs on China reduce demand for the stuff we export,” Jason explained.

However, the biggest problem isn’t tariffs themselves, it’s the uncertainty. “If people don’t know where things will land, they hold back on investing or buying,” Jason said. And when that happens, markets fall.

Should You Sell or Hold Blue Chip Shares During Market Dips?

Jason advises against panic-selling quality stocks during market downturns. “If nothing’s changed fundamentally with the company, there’s no reason to get rid of it,” he says. Shares like Wesfarmers or Commonwealth Bank typically remain strong long-term investments.

Instead, downturns offer a chance to reassess weaker stocks. “Clear the decks of anything that’s not performing. You might be better off cashing out and waiting to buy blue chips when prices are lower,” Jason suggests.

He also stresses the importance of holding cash, especially near retirement. “Cash gives you a buffer to ride out market falls—and the ability to buy when opportunities come up.”

The Importance of Asset Allocation

A balanced mix of shares, property, cash, and bonds helps protect against volatility. “If you’re younger, higher risk is fine. But if you’re close to retirement, check your super. You don’t want 80% in shares without realising it,” Jason warns.

Listen to the full conversation on how to survive a sharemarket slump below.