Super Investment Options
With super, it’s easy to set and neglect. But choosing a suitable investment option will have a major impact on how your super performs. So see what your fund yet others have to give you. Super funds invest your cash to grow your nest egg over your working life. Most super funds let you choose from a variety of investment options, depending on how much investment risk you are prepared to take.
For example, a conventional option shall offer lower risk but lower earnings over the long term. A higher growth option will have higher risk and experience more volatile returns within the short term, but will usually achieve higher returns over the long term. If you are at least 10 years from retirement, you may consider choosing a higher growth option as you have time to ride out the ups and downs on the market. As you get nearer to retirement, you might decide to reduce your level of risk, as protecting your capital will become more important.
You can find out about your fund’s investment options by visiting its website or by giving them a call. You will also find detailed information in the fund’s product disclosure statement (PDS). Most funds have a ‘default’ investment option. Normally, this is a well balanced investment option which has a mix of protective and growth possessions. A fund’s default investment option is also its MySuper option.
See MySuper for more details. Your fund’s various investment options may support the same types of possessions, but at different weightings, to match the known level of risk you are comfortable with. Invests around 85% in shares or property. Aims for higher average earnings over the long term. This also means higher loss in bad years than those you would experience with lower risk options.
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- 2002 – GEICO passes the 5 million PIF tag
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- Real Estate Finance and Investment (required course)
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You can also be able to choose ‘high development’ option with 100% in shares and property. Invests around 70% in shares or property, and the others in set interest and cash. Aims for reasonable returns, but less than growth funds to reduce threat of losses in bad years.
Those losses usually occur less frequently than in the development option. You may even be able to choose ‘moderate’ option with around 50% in stocks and property. Invests around 30% in stocks and property with the majority in fixed interest and cash. Aims to reduce the risk of loss and accepts a lower return over the long term therefore. Yr than in the well balanced or growth options There is less potential for having a bad. Invests 100% in deposits with Australian deposit-taking institutions or in a ‘capital guaranteed’ life insurance policy. This option is designed to ensure your capital and gathered earnings cannot be reduced by loss on investments.
This option aims to display out companies that don’t meet environmental, sociable and governance specifications determined by an investment supervisor. A pre-mixed investment option that comes after an honest strategy could sit down anywhere along the risk spectrum – from high growth to conservative. Some very funds let you customise your account by modifying weightings to the various asset types or choose direct investments, within limits.
For example, you may favour the outlook for international stocks over Australian ones, and ask your fund to rebalance your collection or change the way future efforts are spent. Your fund could also allow you to pick direct investments, so you can run your account such as a self-managed super fund – but without all the paperwork. Most people work for 30 to 40 years and live for another 25 to 30 years after retiring. You want your super to develop and keep pace with inflation during this right time. For this reason, a growth or balanced strategy may suit a long-term investor who won’t be spending their super for further than a decade.
A higher risk strategy may deliver higher returns, however the risk is that there will be loss in bad years. Over 30 to 40 years, it’s likely that any development strategy will eventually lose money in at least 4 to 6 6 of these years. However, there will tend to be more ups than downs. Historically, over any 20-year period, a growth or balanced strategy has given better returns than more conservative investment options.