Everyone is different and when it comes to investing, some people find themselves tossing and turning in bed, while others sleep easy. As an investor or super fund member, the key to getting a good night’s rest is to pick the investments (or investment options in your super fund) that match your personal risk profile.
Risk profiling is a simple tool used to categorise where you fit on the risk-taking spectrum. Some people are natural risk-takers, while others are not. Some people are very comfortable placing their money into higher risk investments (so they have the opportunity to generate a higher return), while others are more conservative and cannot stand the thought of losing money. Neither investment choice is right or wrong; it just needs to be the right one for you.