We’d all like to see our investments grow as vigorously as possible forever. But history has shown the investments that achieve the highest growth also have the biggest ups and downs (or short-term risk).
Take Australian shares, for example. Historically, they’ve provided higher levels of growth, but their value varies a lot more each year than slower growing assets (like fixed interest).
Before you choose your investment options, it's important to think about these factors:
What’s your investment timeframe?
The longer you have to invest, the more time you have to ride out short-term downturns.
How will you react to a market downturn?
If you think you’ll lose sleep, or abandon your investment strategy if the value of your investment falls, a higher risk investment option probably isn’t right for you.
We use the Standard Risk Measure (SRM) to make it easier to compare the risk between different superannuation options.
Talk to QInvest today for affordable and personal financial advice.