Choosing an Investment Strategy That's Right for You

It's a Personal Decision 🎯

There is no single "best" investment option—only the one that is most suitable for you. The default "Balanced" or "MySuper" option is designed to be a reasonable choice for many people, but taking a moment to think about your own circumstances can ensure your super is aligned with your goals.

This guide contains general information to help you think about your strategy and does not constitute personal financial advice. If you are unsure, you should consider seeking advice from a qualified financial adviser.

Factor 1: Your Age and Time Horizon

Your age is arguably the most important factor. Time horizon refers to how many years you have until you plan to access your super (typically at retirement).

• Long Time Horizon (e.g., under 45): You have decades for your investments to grow and, crucially, to recover from any market downturns. A higher allocation to growth assets (like in a Growth or High Growth option) may be suitable, as you can ride out the short-term volatility for potentially higher long-term returns.
• Medium Time Horizon (e.g., 45-60): You might start thinking about gradually reducing risk. You still want to achieve solid growth, but capital preservation becomes more important as you get closer to retirement. A Balanced or Growth option could be appropriate.
• Short Time Horizon (e.g., over 60): Your focus will likely shift from growing your super to protecting it. A Conservative or Balanced option might be suitable to reduce the risk of a major market fall just before you need to start drawing an income from it.

Factor 2: Your Comfort with Risk (Risk Tolerance)

Your risk tolerance is about your personality and how you would react to seeing your super balance fall.

• Would you panic and switch to a more defensive option after a market drop, effectively locking in your losses? If so, a high-growth strategy might not be for you, regardless of your age.
• Do you understand that markets go up and down and feel comfortable staying invested through the dips for the long haul? If so, you may have a higher tolerance for risk.

Being honest with yourself about how you would handle volatility is crucial for sticking with your chosen strategy.

Putting It Together

By considering both your time horizon and your risk tolerance, you can get a better sense of which investment option might fit your needs.

This table is a general guide only. Many people simply stay in the default Balanced option for their entire working life. The most important thing is to make a conscious choice and review it every few years to ensure it still aligns with your goals.