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How much risk are you taking?

The answer to that question is usually "I've no idea". Typically, investors with pension plans or investment products choose to go with the default funds, and have no idea what their fund is actually invested in.

What are default funds?
Default funds are usually types of managed funds, or even With Profits funds, where your money is deemed to be in one of the safer places. But as they can be exposed to lower risk investments, they might not perform as you hope.

Default funds are lower risk because companies invest your money across a variety of industries, meaning if one of the industries falters, then the potential loss is low. On the other hand however, if a single industry becomes particularly prosperous, then the potential gains are also low. In short the more different industries investments are made across, the lower the risk is.

Risk all depends on what you want. Investments are long term plans, and it must be noted that high risk investments over a long period have been known to deliver impressive growth. If you are unsure about any of your investments, or are looking for advice on future investments, please contact one of our financial advisers.

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