Investment planning is all about balance, and generally the returns (gains or losses) you should expect from your super when you retire are likely to reflect the level of risk you're prepared to tolerate.

To strike a balance between risk and return, your investment plan should include a spread of growth assets such as shares and property, as well as defensive assets such as fixed interest and cash. This provides a diversified asset mix.

Volatility

Although history has shown that growth assets like shares and property offer the greatest return over long periods, their value can vary widely in the short to medium term.

This volatility means there is a chance that the money you invest mostly in shares and property could deliver a negative return in any given year.

That said, short-term losses are usually recovered in the long-term. It is important to bear in mind that occasional negative returns are normal and to be expected when you put money into growth asset classes.

As a rule of thumb, when you hear of people making a loss, it may be because they have taken their money out of an investment when their sale price is lower than their purchase price. Those who hold onto their investment over the long-term usually recover from the low points and end up ahead.

Inflation

On the flip side of the risk coin, there is also a potential downside if you're too conservative. If your investment plan fails to grow faster than inflation, you could end up with a smaller retirement nest egg than you'd expected.

What level of risk suits you?

The level of risk you're prepared to take helps to define the sort of investor you are and depends on many factors such as your age, investment experience, goals and your retirement timeframe.

To maximise the return on your investment over the timeframe you choose - and ensure you are comfortable with the level of risk - you might find it useful to compare yourself with the profile of our four typical investor types which appear below.

How do their retirement planning goals match yours? How do you feel about the level of investment risk they are accepting?

Investor Type 1: Cash Defensive - Bill

Bill's priority is preserving his superannuation. He wants to earn some income but because his investment timeframe is short (around 12 months), he's also prepared to take a few risks. Bill's super is therefore likely to be made up mainly of cash and fixed interest securities. The biggest risk Bill faces is that his super may not keep pace with inflation.

Investor Type 2: Conservative - June

June wants all the benefit which could come from holding some growth investments, but will only accept an 'outside chance' that the value of her super could fall in the short-term. Her investment timeframe is between one and three years. June's portfolio is likely to have a small proportion in property and shares.

Investor Type 3: Balanced - Peter

Peter's investing for a longer term (between three and five years) and wants to spread his investments across all the asset classes. He wants both income and growth and accepts that there may be periods where his portfolio 'goes backwards'. In the longer-term, Peter expects to do better than Conservative June. At least 50% of his portfolio is likely to be invested in property and shares.

Investor Type 4: Go-For-Growth - Kristy

Kristy wants to focus almost entirely on growth assets and so about 75% of her investments will be in shares and property. She accepts that in the short-term her portfolio may do worse than cash returns would, and that the value of her super may fall. However, as a long-term investor (at least five years) Kristy's confident that shares and property will outperform all other asset classes.

If you consider these four different investors against our Readymade Investment Plans, you may find it easier to identify the plan that is best for you.

How we match up

GESB is WA's largest locally based superannuation provider and we understand that the way we perform has a major influence on the lifestyle which our members are likely to enjoy when they retire.

That is why we take our performance seriously and provide regular updates. These include:

• our Quarterly Performance Watch; which highlights market trends and the performance of our investment plans.
• our line-up of investment plan returns information; which includes financial year investment performance updates, unit pricing reviews and monthly performance snapshots.

And in terms of industry awards, we have  been rated as the highest quality super fund and received '5 apples' from ChantWest. ChantWest Financial Services Pty Ltd is an independent specialist superannuation research and consultancy firm.  We have also received a Platinum rating for GESB Super and Retirement Income Allocated Pension and a Gold rating for West State Super by SuperRatings which reflect products that provide good value for members.