MY SUPER – WHAT ARE THE RISKS?
When you make an investment choice, there is always a trade-off between risk and return. Your attitude to risk can be influenced by a number of factors including:
- Number of years to retirement
- Amount you require to retire comfortably – (See our Super Calculator)
- Whether you have other investments
- Your knowledge of investing
It is important to balance the risk of short-term fluctuations in the value of your superannuation investment against the long-term retirement benefit that a well-diversified investment strategy, including an investment in growth assets, can provide.
Investor Profiles
Below are 3 different investor profiles. The descriptions may help you identify which type of investor you are, and therefore the level of risk you may wish to be exposed to. We strongly recommend you seek professional advice before deciding on your investment strategy.
Aggressive
"Aggressive" investors are looking for above average performance and will generally be prepared to take above average risk. As a result, this kind of investor takes a longer-term view (seven years or longer) and generally invests predominantly in growth assets, such as shares, property and infrastructure.
Moderate
"Moderate" investors take some risks, but may have less time to weather market cycles than an “Aggressive” investor. This type of investor usually has a medium-term outlook (five years or more), and generally chooses a balanced combination of conservative (cash, fixed interest, income-backed securities) and growth assets.
Cautious
"Cautious" investors tend to focus on investment's risk and return potential over the short-term. As a result, they usually prefer to invest in lower risk/return options, which include a significant allocation to cash and fixed interest.
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