My superannuation plan is currently set to a high-growth plan, and it has performed quite well this year. What are the signs I should look out for to judge if it is a good time to switch to a safer investment plan and safeguard myself from loss? Thanks, Super Juggler
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As with any investment decision involving large sums of money, your best bet is to seek professional advice rather than asking some bloke on the internet. But the short answer is that it really all depends on how old and prosperous you are.
Superannuation is a long-term investment, and it is to be expected that there will be rises and falls; even on a so-called "low-risk" plan. A high-growth strategy makes more sense when you're younger and the date when you'll actually need your superannuation is far away.
As you near your retirement date, a less aggressive strategy might be a better way to go. Just remember that a bigger potential reward always comes with a bigger potential risk -- this generally isn't advisable if you're well into your forties, for example.
Instead of trying to predict future market trends, you need to identify what kind of investor you are. There are numerous online financial tools available that will calculate your super 'risk profile'. This will help to determine whether you should be exposing your funds to higher risk investments or not.
This guide offers some additional tips on how to balance risk when saving and investing. You can also find oodles of information via the Australian Government's superannuation page. If anyone in the finance industry happens to be reading, feel free to proffer your own two cents in the comments section below.
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