If recent global events and shifting economic policies have left you feeling uncertain about your financial future, you are not alone. The markets have been volatile, and many are wondering: What’s the smartest way forward right now? How can you reduce your investment risk for a safer financial future?
At Locumsgroup, we understand that no two clients are alike – especially when it comes to finances. That’s why we work closely with you to develop a personalised investment strategy tailored to your unique goals, your lifestyle, and your risk profile.
There are no “one-size-fits-all” solutions here—only custom strategies that bring peace of mind and long-term confidence.
Here are five simple, proven ways to reduce risk in your investment journey:
1. Know Your Risk Tolerance
Everyone has a different appetite for risk. Some investors prefer to play it safe, focusing on capital preservation, while others are comfortable with more volatility in the pursuit of higher returns.
For example, if you’ve recently received an inheritance and don’t need access to that money for several years, you might benefit from a higher-growth strategy. On the other hand, if you’ve spent years saving for a home deposit, you’ll likely want a conservative approach that prioritises security overgrowth.
At Locumsgroup, we help you define your risk tolerance, whether you’re growth-oriented, conservative, or somewhere in between. Building a strategy that matches your outlook and timeframe is our primary goal.
2. Diversify Your Portfolio
The age-old saying, “Don’t put all your eggs in one basket,” couldn’t be more relevant when it comes to investing.
Diversification spreads your investment across different asset classes, industries, and geographic regions to help manage risk. In Australia, this could include:
- Australian shares and global equities
- Managed funds and ETFs
- Superannuation investments
- Residential or commercial property
- Fixed interest and government bonds
- Alternative assets like infrastructure or REITs
A diversified portfolio ensures that if one sector or asset-class under-performs, investments in other asset-class can help balance that under-performance out—minimising losses and stabilising returns over time.
3. Focus on Long-Term Investments
Long-term investments provide an opportunity to ride out short-term market fluctuations and benefit from compound growth. Returns are free of any Capital Tax liabilities on capital gains when held for more than 12 months.
This “set and forget” approach reduces the temptation to react emotionally to market swings and keeps your wealth-building efforts on track. Whether it’s through superannuation, blue-chip stocks (which are stocks in established & financially stable companies), or long-term managed funds, building a future-proof portfolio takes time—and patience.
4. Rebalance Your Portfolio Regularly
Markets change—and so should your portfolio.
Many investors make the initial effort to allocate their funds appropriately, but then leave their portfolio untouched for months or even years. Over time, certain investments may grow or shrink, skewing your original balance and increasing unintended risk.
Portfolio rebalancing involves reviewing and adjusting your holdings periodically to keep them aligned with your goals and risk tolerance. At Locumsgroup, we monitor the markets daily and can advise when it’s time to rebalance to maintain optimal performance and risk control.
5. Invest Consistently Over Time (Dollar-Cost Averaging)
Rather than investing a large lump sum all at once, consider contributing a fixed amount at regular intervals—weekly, fortnightly, or monthly. This technique, known as dollar-cost averaging, helps smooth out market volatility and reduces the risk of buying at a market high.
By building the habit of consistent investing, you gradually grow your portfolio over time while lowering the emotional stress that can come with market timing.
The Importance of Trust and Transparency
Above all, it’s essential to feel confident in your financial plan—and in the person helping you build it. Working with a trusted adviser should feel reassuring, not overwhelming.
At Locumsgroup, we’re always here to listen, support, and explain everything clearly. No question is too small—because when it comes to your money, you deserve clarity, confidence, and control.
