It doesn’t matter whether you are considering investing in shares, property, SMSFs or making additional superannuation contributions, when it comes to investing, your emotions play a big part in your decision-making.
In our world, this is called your “risk profile”. Essentially, your willingness and ability to take risks.
It’s important to understand because if your investment plans don’t align with your risk profile, market cycles could undo your carefully considered plans.
So what is my investment risk profile?
When evaluating your investment risk profile, there are 3 key factors to contemplate:
1. Consider your goals
We all have dreams, bucket list items and goals we want to achieve. But the way we save or invest for each goal can be different. For example, funding your kids’ education will be a shorter term investment compared with saving for your retirement. As a result, your investment strategy and the amount of risk you are prepared to take will be different for each of these goals.
2. Time to achieve your goals
Even people who are open to following riskier investment strategies may need to be more conservative the closer they come to retirement or even once they are retired. Conversely, if you have many years of working life ahead of you, it could be detrimental to follow a highly conservative investment strategy.
3. Trust in your advisor
Bad news sells, so stories about economic downturns or adverse fluctuations in the stock or property markets will be widely reported. Whereas upturns in the economy don’t receive the same coverage. Having trust and faith in your financial advisor is important. In addition, you should expect to experience market fluctuations every 5-7 years. So don’t listen to the media, listen to your investment planning advisor.
Investing in shares
When it comes to investing in the share market or your super, there are 3 general approaches based on your risk profile:
1. Aggressive Investment Strategies
These strategies invest heavily in shares rather than more conservative options such as fixed interest bonds or cash. Typically, this strategy is more suitable for people who are in the early-middle stages of their career or those with a high growth risk profile.
2. Conservative Investment Strategies
These strategies are highly conservative with the bulk of funds placed in “safe” investments such as fixed interest bonds and cash. Typically, retirees and pre-retirees with a low risk profile will follow this strategy.
3. Moderate Investment Strategies
As the name suggests, this strategy typically has a fairly even split between “riskier” investments such as shares and “safer” investments such as fixed interest bonds and cash. In other words, the investments are fairly evenly split across growth and conservative investment strategies.
Intelligent investments tailored to you
At Treysta, we do things a little differently and call it Conscious Investing It means we believe you should have choice and flexibility about your risk investment portfolio. We also believe you should be actively involved in determining your investment strategy (if you wish to) and encouraged to think about what’s important to you.
When you meet with your Treysta advisor, you’ll be encouraged to ask lots of questions and think about what’s important to you.
We don’t do cookie-cutter investment options.
Instead, you’ll be given the flexibility to invest in industries, individual companies or general themes that align with your goals, interests and values. Along the way, you’ll be guided, educated and protected from making emotionally driven investment decisions which could cause significant investment losses.
The choice is always yours.
Any information we share is general in nature and does not take into account your personal situation. You should consider if the information is appropriate for your needs and, where appropriate, seek professional advise.