Get the right balance between risk and return
Being comfortable with your investment strategy is just as important as achieving your investment goals. It's about understanding your risk tolerance, and getting the right balance between risk and return.
Naturally, everyone wants the biggest and best returns. However, higher returns tend to involve investing in higher risk options. And that generally comes with higher levels of volatility.
Higher volatility means you may achieve some great long-term earnings, but you may also experience negative returns from time to time that result in dips or fluctuations in your earnings.
Two questions you should ask yourself
1. How long do I have to invest?
The longer you have to invest, the more likely it is that you will be able to ride out any ups and downs in the market.
|Short term (less than 3 years)||Medium term (3 to 7 years)||Long term (7+ years)|
|Higher risk options may not suit you.||A conservative or balanced option might suit you best.||You probably have time to ride out the ups and downs of a higher risk option.|
2. How comfortable am I with risk?
Essentially this question is about knowing how you would feel if your investment took a hit.
Ask yourself this... If my investment dropped in value, even temporarily, would I worry or lose sleep over it?
If your answer is 'yes', then you're probably not suited to a high risk option.
We have a team of qualified financial planners who can help you work out your risk profile and recommend a suitable investment strategy. Advice can be provided quickly and easily in person. There’s no obligation, and in most cases, no charge either. Find out more about our advice service.
If you’d like to explore your options in your own time, head to Beeline – our award-winning online guidance and advice tool for VicSuper members. It can help you set goals for your super savings and compare your investment choices – so you can get more of the future you want.
Don't sit there wondering - our team members are here to help!