Are You Taking the Right Amount of Risk for Your Age & Goals?
Investment risk is often misunderstood. Many people think higher risk means gambling, while lower risk means safety. In reality, risk is about alignment — aligning your investment strategy to your goals, timeframe and stage of life.
Taking too little risk can be just as damaging as taking too much. For high-income earners and households with $500k+ assets, understanding risk correctly is critical for long-term wealth building.
Why Risk Matters
Risk determines how your money grows. The right level of risk:
• Maximises long-term returns
• Reduces the chance of running out of money in retirement
• Balances volatility with confidence
• Keeps your strategy aligned to your goals
Risk is not static. It changes as life evolves — income increases, family needs shift, retirement approaches.
Common Risk Mistakes
1. Being too conservative too early
Investing heavily in cash or conservative funds in your 30s, 40s or early 50s can severely limit your retirement wealth. With decades to invest, growth assets like shares are often more appropriate.
2. Being too aggressive too late
Approaching retirement with a high-risk allocation can expose you to volatility at the wrong time. A downturn just before retirement can have long-term consequences.
3. Misaligned superannuation settings
Default super options often don’t match your goals. Many investors sit in “balanced” funds without understanding how much risk is actually appropriate.
4. Reacting emotionally to markets
Selling during downturns and buying during peaks is the fastest way to erode wealth.
Factors That Determine Your Risk Level
A robust risk assessment considers:
• Your investment timeframe
• Your retirement goals
• Your income and cashflow stability
• Your tolerance for volatility
• Family situation and financial commitments
• Existing assets and liabilities
• Your need for liquidity
This helps determine the right mix of growth vs defensive assets.
Risk by Life Stage
In Your 30s–40s
Time is on your side. Growth assets are typically appropriate to maximise long-term compounding.
In Your 50s
Risk still matters, but balance becomes important. This is where transitioning strategies begin.
Pre-Retirement (55–65)
A mix of growth and defensive assets helps protect your savings while still generating returns.
Retirement
Portfolios shift towards income consistency, liquidity and managing longevity risk.
How We Design Risk-Aligned Portfolios
Using professional risk profiling, investment modelling and research, we:
• Assess long-term goals
• Determine a suitable investment profile (e.g., 70% growth)
• Build diversified portfolios across multiple asset classes
• Review and rebalance regularly
• Adjust strategy as your life evolves
This removes guesswork and ensures your strategy remains aligned, not emotional.
The Bottom Line
The right amount of risk is not about being aggressive or conservative — it’s about being informed and strategic. When risk is managed properly, it becomes a powerful tool that accelerates wealth creation and supports long-term financial independence.
This article provides general information only and does not consider your specific circumstances. Before making investment decisions, consider speaking with a licensed financial adviser.