Investment stages
Wealth accumulation
While you're working, in addition to paying off debt, you may need to consider whether it is appropriate to contribute more to your super. One of the benefits of an early start to contributing to super is that it is invested for a longer period and so has a greater opportunity to grow. This longer time frame also leaves the investment less susceptible to short-term fluctuations in the market. If a super investment suffers a loss for someone in their 30s or 40s, it still has decades to recover before the investor needs to access their money. In fact market "pull-backs" can be an opportunity for super contributions to be invested at good value prices.
Wealth protection
As someone nears retirement, they will probably still be focused on growing their super but they don't have as long to recover from any potential losses. At this point, protecting the wealth they have accumulated is likely to be an important consideration as this wealth will provide the income they will live off when they retire. For those in this stage it is likely that their appetite for risk will probably be lower because of the shorter period to retirement.
Income phase
In retirement the forces that acted in a positive way during accumulation now may work against the retiree. Instead of contributing when prices are low after a market fall, consumption needs can force the sale of risky or growth assets at depressed prices. Any potential investment losses could have an immediate impact on the retiree's well-being and so their 'risk profile' is likely to be more conservative, although this would depend on their particular financial circumstances. The focus is on ensuring that the accumulated super can provide a regular income for as long as they live.
Speak to your financial adviser about the appropriate strategies as you move through these investment stages.