Knowing what to expect with investments
Before you make an investment choice it’s important to understand the basics of investing your super and factors that may influence your investment strategy. By getting a handle on concepts like your timeframe and market volatility, you’ll know a little more about what to expect.
Once you’re across the basics of investing with an overview of important concepts like risk and return, asset classes and diversification – there’s a little more than meets the eye when it comes to understanding investments.
To appreciate how your super is invested and ensure you stay on course with your strategy you need to understand that it’s a long term investment, it’s subject to some volatility and it’s invested in units which represent the value of the underlying assets.
Super is a long term investment – it’s even working for you when you’ve retired
Super is for the long haul, even when you eventually retire your money will still be invested for some time. With a long timeframe your investment opportunities are many, and you have time to see out any volatility and time to continue to benefit from compound returns. Once you choose your long term strategy it’s recommended you stick with it unless your personal circumstances or financial goals have changed.
Markets are volatile from time to time – expect it, but don’t react to it
Market volatility is a normal part of investing, especially with growth assets. For those of you who’ve been invested in super for some time - you’ll be familiar with volatility. History shows us the markets typically recover and return to the same or higher ground after a bout of volatility.
If you’re really uneasy with market drops and you’re invested in growth assets in some proportion, there’s a chance your risk tolerance is not in line with your strategy. For members with low tolerance to extreme volatility the Fund offers the MVP feature.