Don't Get Overprotective Of Your Superannuation Fund
19 November 2008
If a year in which you make losses in your superannuation fund makes you nervous, avoid becoming overprotective. Due to the risky nature of investment, there are almost certainly going to be years where your superannuation fund makes a loss. The only way to minimise this is to choose investment options with a lower level of risk. Unfortunately, such investments have a tendency to grow exceptionally slowly. Switching to more conservative types of superannuation funds and investment options after you have made a loss can thus serve to make your loss worse, as your superannuation fund will not be taking the kinds of risks that could lead to the vigorous gains that can make up for a bad year.
Whether you are using an industry superannuation fund, a self managed superannuation fund or some other type of superannuation fund, do not choose the lowest risk options just because you are afraid of losing any money. Find an acceptable level of risk that will lead to an acceptable average rate of growth and make sure you are constantly planning in order to reach your goals for retirement savings.
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