Written For The Australian - Super investors face 2026 dilemma of banking big gains or chasing more returns
by James GerrardWed Dec 17 2025
Double-digit returns in super this year — so do you bank the gains or roll the dice again in 2026?
That's the question I'm getting from clients right now, and it's a good one. Most balanced, growth and high-growth super investors are finishing 2025 with returns north of 10 per cent, largely on the back of booming international sharemarkets. The temptation to lock it in and shift defensive is real.
But here's the thing — the experts are still bullish. Morgan Stanley has set a 9250 target on the ASX 200, implying around 10-11 per cent total return next year, with resources tipped to outperform banks. UBS and Citigroup are both eyeing 7700 on the S&P 500, a 13 per cent gain, driven largely by the AI infrastructure build-out.
So what do you do? In my view, there are three sensible approaches.
First, do nothing. If you've been in the same long-term strategy for years, stick with it. Warren Buffett's line rings true: "The stockmarket is a device for transferring money from the impatient to the patient." Trying to jump out and back in usually costs more than it saves.
Second, dial down the risk. History tells us markets drop every four to five years — and the last real drop was 2022. Valuations are stretched. Think of it like Jenga: the higher the tower, the more fragile it gets. Nobody predicted Covid, the Ukraine invasion or Lehman Brothers as catalysts, but the falls were 30 per cent, 15 per cent and 40 per cent respectively.
Third, apply the "sleep at night" rule. If you're near retirement or genuinely anxious, moving from high-growth to balanced isn't market timing — it's risk management.
Younger investors with decades ahead? Stay the course, or lean in. Just be honest about your stomach for volatility, because a fourth consecutive strong year is far from guaranteed.