Oil is over US$100 a barrel, bond yields are at a three-year high and the Australian market is about 5% below the record it set in early August. None of that is pleasant to watch, and the instinct it produces — move to cash until this settles down — is the most expensive instinct in investing.
We have put the case together from the data rather than from opinion. It runs on forty-two years of daily Australian market history, from August 1984 to today, and it is interactive: there is a calculator you can put your own balance into.
What the numbers say
Since 1984 the Australian market has fallen more than 10% from a high in 17 separate episodes. It finished higher after every one of them. In a typical calendar year it falls about 12% at some point on its way to finishing the year, and 30 of the last 41 completed years finished higher than they started.
The cost of moving to cash is not theoretical. Ten thousand dollars invested in Australian shares in August 1984, with dividends reinvested, is worth about $437,800 today. Miss just the ten single best trading days out of 10,643 and it is $254,400 — 42% less, for being out of the market on ten days.
The reason a handful of days does that much damage is that they are not scattered evenly through history. Eighteen of the twenty best days happened while the market was more than 10% below its high, and sixteen of them fell within ten trading days of one of the twenty worst days. The best day of the last four decades and the worst were often days apart. Getting out is the easy half of the decision; getting back in has to be done in the week the news is at its worst.
What actually happened after the headlines
The note also tracks what Australian shares did after the days that led the front page — Iraq invading Kuwait, the Gulf War, the Asian financial crisis, September 11, Lehman Brothers, the euro crisis, Brexit, the pandemic, Ukraine, and the 2025 tariff announcement. Ten of the eleven events with three years of history behind them were followed by a positive three years. The one that was not was a banking crisis rather than a geopolitical shock.
None of this means doing nothing
Staying the course is not sitting still. If you are drawing a pension, the next stretch of payments is not sitting in shares — that is what lets the growth assets be left alone. Portfolios that have drifted get rebalanced, which mechanically buys what has fallen. Contributions keep buying at lower prices. And falls create tax opportunities a market peak does not.
The question worth asking is whether anything has changed about when you need the money — not what the market did last week. If this stretch is keeping you up at night, that is worth a conversation.
Figures are computed from the All Ordinaries index from 3 August 1984 to 10 September 2026, with dividends added at 3.0% a year and reinvested daily — a deliberately conservative rate, measured at 2.8% and 3.1% a year against two live Australian index funds, and excluding franking credits. Before fees and tax. Past performance is not a reliable indicator of future performance. This article contains general information only. It does not take into account your objectives, financial situation or needs, and you should consider whether it is appropriate for you before acting on it.