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Superannuation

Managing your investments

Investing your money is an effective way to build your wealth

However, investing is intrinsically linked to taking risk. In fact, investment risk is defined as the chance you will either lose or make money on an investment.

As all investments come with varying degrees of risk, it is important to recognise your appetite for risk and build a portfolio that suits your risk tolerance so you can sleep at night.


There are several factors that measure risk tolerance:

  • Desire to take risk - Some investors enjoy the inherent uncertainty of investing and are inclined to take on high-risk investments. More common however is an aversion to the stress that a large fall in an investment’s value can produce.
  • Financial capacity to take risk - A couple with a new baby and a mortgage will have a considerably different capacity to take risks than a single person just starting out in the workforce.
  • Your need to take risk - This is tied to your investment time frame. If you are 30 years old and planning 35 years ahead for retirement, you will probably be happy to accept greater risk, as short-term volatility is smoothed out, to achieve your goals. On the other hand, if you are nearing retirement, you’ll probably not want to risk losing your money as there isn’t the luxury of time to recover from losses.

Risk and return

With greater risk, there is the opportunity for greater returns. Different types of investments, or asset classes, have greater risk and the possibility of higher returns. There are four main asset classes:

  • Shares (also known as equities)
  • Property
  • Fixed interest
  • Cash.

Each asset class has individual characteristics and carries a different level of risk and return to suit a range of investor types.


Minimising risk

While risk is an unavoidable part of investing, there are steps you can take to minimise your exposure to unintended risk through diversification and where possible, making longer-term investments.


What type of investor are you?

Understanding what type of investor you are, and therefore what types of investments are appropriate to you, is all about your personal circumstances and your attitude towards investment risk.


How a financial planner can help you

A financial planner can help you understand your risk profile and build a portfolio of investments that matches your risk profile and your investment objectives.

For more information on investing visit the 'Investment Fundamentals' video.

To make an appointment with a Bridges financial planner - your initial consultation is complimentary and obligation-free. Visit Bridges to find out more about Bridges and the vast range of services available, or call Silvana on 8212 6166.

Our Pre-retirement Seminars, presented by Bridges Financial Services, cover a wide range of useful information for anyone thinking about retiring. Our next seminar will be held on Tuesday 10 July 2018 at the Credit Union SA Head Office.

Making smart financial choices can be difficult. Put yourself in the shoes of five animated couples to help them make smart financial choices.

How we can help you

Many people are aware that they need professional financial advice but are unsure of where to start. Bridges are here to help.

Is your retirement measuring up? Find out by completing a quick test using the Bridges Retirement Lab.

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Bridges Financial Services Pty Ltd (Bridges) ABN 60 003 474 977, ASX participant, AFSL No 240837. This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner. Examples are illustrative only and are subject to the assumptions and qualifications disclosed. In referring members to Bridges, Credit Union SA does not accept liability or responsibility for any acts, omissions or advice provided by Bridges or its authorised representatives. Bridges is part of the IOOF group.

Credit Union SA refers its members and other people to Bridges and in return receives a commission of up to 22.5% of the fees and commissions they receive on investments, and a trailing commission of up to 0.20% per annum on funds held under management.