Choosing an investment option for your super really depends on the level of risk (or volatility) you are comfortable with, and your life stage.
How do I choose which investment option is best suited to me?
The level of volatility you’re prepared to accept in your super investment is all about your ability to sleep at night. Generally speaking, investments with higher returns come with more volatility across time and tend to carry a higher level of risk. Investments with lower returns usually experience less volatility and are considered lower risk investments.
It’s important to have a think about what type of investor you are and how comfortable you feel with volatility in your super investment. This will help you to determine which investment option might be best suited to you. Of course, you need to take into account your life stage as well.
Your life stage
Your life stage can influence the decision you make about your finances including how you invest your super. For example, if you’re in your 20s and 30s, you can probably afford to invest your super in a higher risk option which includes more Growth Assets than Income Assets.
On the other hand, if you’re starting to think abut cashing in your super in its entirety, it’s probably best to be a bit more conservative in your choices.
Therefore, the timeframe of your super investment is one important factor to consider in reviewing your investment choice. This is why your super investment needs to be reviewed across time and changed in line with your life stage.
If after reading our investment section, you’re not sure about which strategy to invest in, you may want to have a chat to a financial advisor to get some independent investment advice.