When considering your investment it is important to understand that:
All investors need to decide how much investment risk they’re prepared to tolerate (or that won’t keep them up at night). Your individual circumstances may affect the level of risk that you are willing to take and therefore, the potential of return on your investments. Factors that you and your Financial Planner need to consider include:
For example, let’s say you’re aged 40 and your goal is to save for your retirement at age 60. If you are comfortable with your investment experiencing some bad years as well as good, you might invest in a riskier but long-term higher-performing asset class such as shares, given that you have 20 years to ride out any volatility.
|GENERAL RISK/RETURN EXPECTATION||INVESTMENT TYPE (ASSET CLASS)|
|Low risk, low return||Cash (term deposits, savings accounts)|
|Medium risk, medium return||Bonds and fixed interest|
|Moderate to high risk and return||Property|
|High risk, high return||Shares (also called equities or stocks)|