Sleeping like a baby?


Your age, years until retirement and your personal financial circumstances are just some of the things to think about when choosing an investment strategy. Equally important are your personal feelings about investing. You need to be able to rest easy feeling comfortable that the decision you've made is the right one for you.

In short, your level of 'risk tolerance' (sometimes called the 'sleep factor') will affect your investment choices. Some investors are content to ride out periods of negative returns believing that what goes down must come up. Others would find that situation stressful and prefer to opt for investments that offer lower average returns but with less volatility.

If you have high tolerance for risk, you are more likely to choose the Growth option. If you have a low tolerance for risk, you are likely to favour the Stable or even the Cash Plus option.
Remember, too, your risk tolerance is likely to change over time. That's why it is a good idea to revisit your investment choices from time to time, say, every five years.

If you're not sure where you sit on the risk tolerance spectrum, check out the 'Risk recommender' under the 'Calculators' tab at the Retirement Commissioner's website The calculator only takes a minute to complete. It includes questions about your appetite for risk as well as factors like age, income, dependants, level of savings and debt and your investment timeframe. Answer the questions, hit 'calculate' and get an indication of whether your answers suggest you are a low, medium or high risk investor and the appropriate investment strategy.
You can read more about choosing an investment strategy in your member booklet in the Documents & forms section.

Switching investment options

You can change your investment option anytime online at or by completing and sending in the Investment Choice Switching form which you can download from the website. Changes take effect on the first of each month so make sure Mercer has your online change or completed form at least five working days before the beginning of the month.

The hare and the tortoise

A word to the wise. Chasing good returns is a dodgy strategy. Just because an investment performs well one month or year doesn't mean it will do so the next. This is particularly true of investments with a higher proportion of shares and property investments like the Growth and Balanced options. It's best to choose a strategy that suits your investment goals and risk profile and stick with it until your circumstances change. And, while other funds may appear to be outperforming the PSS, most funds that get the highest returns also spend their fair share of time among the worst performers. When it comes to investing for the long term, slow and steady wins the race.

This information has been prepared by PSS for general information only. The information does not take into account your personal objectives, financial situation or needs. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult a financial adviser before making any investment decision.


This website is provided by Mercer (N.Z) Limited on behalf of the trustee of the Police Superannuation Scheme (PSS). The trustee pays a fee for the provision of this service, however this fee is not conditional on you using this service or acting on the information or advice provided through this service.

PSS Trustees Limited is the issuer of the Police Superannuation Scheme (PSS). A copy of the PSS product disclosure statement is available under Documents and forms and at