Choosing the right investments

Making the right investment choice will have a huge impact on your super balance and your piece of mind.

The type of investment you choose will usually depend on several different factors, such as:

  • how long you have left to grow your super
  • the level of risk you are willing to take
  • your personal financial circumstances and your plan.

So how do you feel about risk and growth?

All types of investment have some degree of risk and you need to decide how comfortable you are with risk. You should not pick an investment option that keeps you up at night worrying that your returns will be negative. Your returns will fluctuate from year to year but it is important to remember that super is a long term investment.

The degree of risk you take will depend on what type of investment you choose. A good rule of thumb is that the higher the risk then the higher the potential returns and the lower the risk then the lower the potential returns. This is demonstrated in the graph below: 

Investment Strategy characteristics 

For more information on risk and return, click here.

Translating risk into investment options

Once you understand what level of risk you are willing to take and the relationship between risk and potential returns, you can start picking the asset classes which suit your investment profile. If you look at the graph above, it lists some of the common asset classes and their levels of risk and return. Click on the factsheet called ‘Understanding investments’ for further details on the four main asset classes.

Get some help

To find out more about asset classes and which option would best suit your investment objectives, contact your financial adviser. If you don’t have an adviser, click here to find one near you.