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The Australian dollar hit a 11-year low on Wednesday \u2013 sinking to levels not seen since the global financial crisis \u2013 and continues to lose value on Thursday morning.<\/p>\n
The local dollar was at 65.88 US cents at the close of market on Wednesday, which was the lowest it had been since the global financial crisis in 2009.<\/p>\n
On Thursday morning it slipped even lower, hitting 65.48 at 11am AEDT.<\/p>\n
The Australian currency is taking a battering as a proxy for China’s misfortunes with the global markets fearing the coronavirus cannot be contained.<\/p>\n
This means bad news for those Australians about to go on an overseas trip, with less foreign money in their wallet for every dollar they give up.<\/p>\n
The Australian dollar was as high as 81 US cents just two years ago, meaning a $10,000 holiday then would now cost $12,000.\u00a0\u00a0<\/p>\n
Imported goods, like fuel and electronics, will also face price pressures.<\/p>\n
However, when the Australian dollar sinks, exporting industries like our farmers and education rejoice \u2013 as the prices for their products and services become more globally competitive.<\/p>\n
The international and local share markets have also plunged this week on the back of worldwide coronavirus concerns.<\/p>\n
The benchmark ASX200 lost about 6 per cent on the first three working days this week, equating to about $143 billion in value.<\/p>\n
Although the majority of Australians don’t own shares directly<\/em>, most people’s wealth is certainly impacted by the health of the stock market.<\/p>\n Why? Because of compulsory superannuation.<\/p>\n Australia is unusual in forcing everyone to have retirement savings \u2013 and this means every adult has at least some money indirectly invested in the share market.<\/p>\n Founder and chief of super comparison service Roll-It Super, Mark MacLeod, told Yahoo Finance<\/em> previously that the average Australian has about $100,000 saved in super.<\/p>\n This is a rough estimate, as the total varies wildly according to age, time in the workforce, and income.<\/p>\n But assuming a $100,000 balance, the typical Australian has lost $6,000 in just three days.<\/p>\n Older Australians that are closer to retirement would certainly have lost even more, as they would have larger balances.\u00a0\u00a0<\/p>\n MacLeod advised Australians to not panic during times of share market volatility.<\/p>\n “Super is compulsory and you can\u2019t take your money out and put it under the mattress – unless you are retired \u2013 and even then I wouldn\u2019t recommend it.”<\/p>\n Trying to time the market is a mug’s game, so it’s best to think long-term.<\/p>\n “The truth is that even professional investors have a difficult time picking the bottom or top of a market,” said MacLeod.<\/p>\n There are even ways to make money when stocks plunge in value.<\/p>\n It’s called “shorting”. And while this was a tool not easily accessed by retail investors, these days there are exchange-traded funds (ETFs) that will rise in value when a specific market falls.<\/p>\n “Remember the Hollywood blockbuster \u2018The Big Short\u2019 where a bunch of investors made massive gains on the housing market crash?” Stake operations manager Sarhang Shafiq told Yahoo Finance<\/em> last year.<\/p>\n “That’s what it\u2019s all about \u2013 taking the ‘short’ or ‘other’ side of the market.”<\/p>\n Admittedly, this strategy does make some people uncomfortable.\u00a0<\/p>\n “Shorting as an investment method has some readers shaking their heads as you\u2019re essentially betting on the market going down.”<\/p>\n Make your money work with Yahoo Finance\u2019s daily newsletter. Sign up <\/strong><\/em>here<\/strong><\/em> and stay on top of the latest money, news and tech news.<\/strong><\/em><\/p>\n Follow Yahoo Finance Australia on <\/strong><\/em>Facebook<\/strong><\/em>, <\/strong><\/em>Twitter<\/strong><\/em><\/a>, <\/strong><\/em>Instagram<\/strong><\/em> and <\/strong><\/em>LinkedIn<\/strong><\/em>.<\/strong><\/em><\/p>\n<\/div>\nWhat to do with your super during a market crash<\/h2>\n
How to make money during a market crash<\/h2>\n