April 14th, 2014

Super accumulates over such a long time, it can be tempting to think of it as something you can simply set and forget.

But it is your money, and the good news is you don’t have to be a financial whiz to understand the basics of investment choice and the options available to you.

Traditional approach – risk profiling

The traditional starting point to determine your best investment choice is to look at your risk profile – in other words, how sensitive you are to occasional falls in investment markets.

The highest long term returns often come with a higher risk of short term negative returns. While it’s important to realise that taking higher risk does not guarantee a higher return, if you have plenty of time before you need to use your investment and you’re comfortable about hanging in there through the ups and downs, you could do well from growth investment options, like shares, property or some combination of these.

On the other hand, if you’d rather play it safe and make steady progress, or if you don’t have the time to wait for investments to come good over the long-term, you’re likely to feel more comfortable with more conservative investments, like cash, fixed interest, or some combination of these.

If you’re somewhere in between these risk profiles, a balanced investment portfolio may be more your style – that is, a combination of high-risk, long-term assets and some more stable choices.

Alternative approach – purpose-driven investment

An alternative approach is to look at your risk profile as a starting point but then consider what you want to do in your retirement. This way, you can design a unique selection of investment options around your dreams and your unique needs.

Purpose-driven investment is a simple, focused approach to financial planning that’s based around you and your dreams. And if those dreams have multiple facets – say an overseas holiday plus a steady income – or if they change over the years, it’s easy to match and change your investment choices to meet those objectives too.

At Sunsuper, we can help you determine your risk profile, what market volatility might mean for you, and the range of investment options that can help you achieve your own unique set of dreams for retirement. Just call our Member Advice Centre on 13 11 84 and talk to a Sunsuper financial planner soon.

Prepared and issued by Sunsuper Pty Ltd (ABN 88 010 720 840, AFSL No. 228975), the trustee and issuer of the Sunsuper Superannuation Fund (ABN 98 503 137 921). This article contains general advice and does not take into account your personal objectives, financial situation or needs. You should consider the appropriateness of this advice having regard to your own personal objectives, financial situation and needs. You should obtain and consider the Product Disclosure Statement (PDS) before deciding to acquire a financial product. Sunsuper PDSs can be obtained by visiting sunsuper.com.au or by calling 13 11 84. Past performance is not a reliable indication of future performance. The financial planners in the Member Advice Centre provide simple advice about super at no additional cost. More detailed advice, including that provided as part of the SunTracker program, may incur a fee. All advice is provided by representatives of Sunsuper Financial Services Pty Ltd (ABN 50 087 154 818, AFSL No. 227867), wholly owned by the Sunsuper Superannuation Fund.