How risky are my investments?
When asking how risky your investments are, you have to consider the different types of risk.
The most obvious risk is that your investments don't perform as well as you hope, or even go below the value of what you save – this is called "capital risk". But there are other risks too:
- Like not taking enough risk when you invest – for example, by investing in low-risk funds for a long period of time so that your Retirement Account doesn’t grow enough to buy an adequate pension (opportunity cost risk); or
- That your Retirement Account may not keep pace with the cost of buying a pension (pension conversion risk); or
- Where your investments don’t grow quickly enough to keep pace with or beat inflation (inflation risk).
All of these factors are important – because you need to make the most of your opportunities to save your money for your retirement. However, these factors may be more or less important to you depending on your age.
Use the interactive chart below to understand how each of these risks apply to the different investment types and how this compares with the potential returns. Click here if you want to find out more about the investment types.
