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Time Machine: Investing during the GFC

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Time machine – Hot topics from the past. 

The share market is down, really down! The last time we saw such a drop was the Global Financial Crisis (GFC) – The Australian Stock Exchange (ASX) fell 54% over 16 months. And now, we are seeing a similar situation.

Many of us did not experience the full effect of the GFC. Some may have been too young to remember. And now we might be scared… because this is all new.

To help understand what is happening – we rewound the clock 12 years ago to the 14th of March 2008 – Right in the heart of the GFC.

What we found were some interesting articles about the share market being a rollercoaster, house prices falling and divorce rates high. 

Here are the key takeaways:

  • Research at the time found that older Australian’s had about 60% of their wealth tied up in their primary residence. With superannuation taking a hit. Many faced having to access the equity in their home. Reverse mortgages were discussed for older Australians to prevent them from selling their homes.
  • 80% of Australia’s super accounts were ‘Balanced’ and included at least 30% Australian Shares and 20% International Shares. This caused superfunds to suffer in share market downturns.
  • There was a strong message that selling shares in the downturn would ensure that the chances of recovery were lost forever.
  • Mortgage Intrest Rates were rising amidst the GFC. Standard variable loans were the highest they had been in 12 years – Reaching 9.45% for a standard variable loan. Rates quickly dropped in 2009. 
Historical Interest Rates – 30 years

Do you remember what it was like living/investing through the GFC? We would love to hear your story. To share please contact us.

Oh and if you want to read some news articles from the GFC:

Panic selling houses can be a costly mistake.

Riding out the share market rollercoaster.


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