A horror year but...

Fund manager performance figures released by Mercer this week truly underline how 2007-08 was a horror a year for most share investors.

All but one of the 123 Australian share managers surveyed by Mercer produced a negative return.

And investors have had to cope with a financial year characterised by three consecutive negative quarters on the Australian share market - the first time this has happened since December 1990, says Mercer.

After having enjoyed four years of 20%-plus annual returns - an overall increase overall of almost 150% for that period - the S&P/ASX200 returned a negative 13.4% for 2007-08.

Yet despite this, the S&P/ASX200 still managed to annually return 16.2% for the five years to June 30.

These figures really emphasise, of course, the desirability of taking a longer-term approach to investing.

Just think, the market has historically continued upwards over the long-term despite such occurrences along the way as the Asian crisis of 1997, the tech wreck of 2001, and September 11 - just to name some of the more recent setbacks. The same applies if you were to look back to the distant past.

This is really a time for investors to consider obtaining quality professional advice regarding such factors as how to react to this market, the appropriateness of investment portfolios - including asset allocation and suitability for personal circumstances, including tolerance to risk.

I notice that some large super funds are sending literature to their members pointing out that despite short-term volatility, the market has historically pushed onwards and upwards over the long-term. And these funds are typically urging members not to make changes to the asset allocation of their super portfolios without first considering professional advice. (Many funds are no doubt using their websites as a means to urge this caution among their members.)

This is a smart move by such funds at a time when many their members are really in need guidance.

Many financial advisers would now be discussing with their clients the risks involved with trying to time the share market, attempting to pick the best time to buy or sell. It can be a highly dangerous exercise.