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Easter is definitely a time for baskets of eggs to celebrate the occasion, or simply the chocolate. It’s also a good time to review whether your eggs are weighing too heavily in one basket, People’s Choice Senior Financial Planner Sally Kolbig says.

“Smart investment is about properly managing risk for the returns you want – and the same approach can also deliver better returns across more than investment,” she said. “Diversification and common sense are vital if you want to build a stronger future.”

1. A basket of superannuation

“Superannuation is a basket of investments designed for long-term wealth creation, so while you can certainly set and forget, it’s a good rule of thumb to review your balance and allocations at least once a year,” Ms Kolbig said.

“Investment classes like cash and fixed interest deposits are defensive; they are designed to be safe over long periods of time, but they don’t offer much by way of wealth creation. You can also choose high-growth assets that come with risk but may deliver the zing your basket needs.

“Adjusting these balances in your superannuation basket is vital – they need to match your stage of life, needs and expectations. Ask yourself about your own investment timeline, speak with your financial planner, and adjust your balances accordingly.”

2. A basket of housing

“If you own your own home, you may be tempted to look nearby for an investment property. While you may stand by the fundamentals of the area, you also need to ask whether you are exposing yourself to the same risks across two properties – a classic case of too many eggs in the one basket,” Ms Kolbig said.

“Look further afield to spread your risk, whether that be a different suburb with a different profile, or to a different state with a significantly different property outlook and demographics. It will take more research, it will take longer to understand the dynamics, but your property basket will be more balanced and you’ll be better protected in the years ahead.” As a guide to help you find the most liveable and affordable houses, take a look at our People's Choice of Housing here.

3. A basket of equities

“Unless you have a significant investment pool for shares and equities, it may be better to spread your risk through a Managed Investment Fund,” Ms Kolbig said.

“You will pay for the service – so always take a look at the fees involved – but you will also have access to a greater variety of shares, industries and economic drivers than if you had invested your entire pool into one company.”

4. A basket of sales and purchases

“Many people have been exposed to ‘overseas traveler remorse’: that sinking feeling when you buy foreign currency, and then see your investment dwindling in the following days as currency rates change,” Ms Kolbig said.

“The same can be true of investments: if you purchase or sell an investment in one block, your returns are locked into that single transaction and you are at the mercy of what comes after as you assess your decision.

“Spreading transactions over time can lessen the impact of that one-off transaction and can be a healthy strategy to balance your basket. Of course, you may have a good reason to sell or buy at any one point – external events may necessitate a rapid change, or a company may be subject to a significant event – but you should always at least think about how the costs of the timing of your actions can be spread through healthy diversification.”

5. A basket of sense

“There are some exciting investment opportunities out there, but there are also many scams out there,” Ms Kolbig said.

“You may be presented with some amazing returns as part of an exclusive offer. But it’s often exclusive because the scammers don’t want you to talk with other people before handing over your money.

“There is nothing wrong with investing in tried and tested vehicles – they may be successful over many years for that very reason. But always, always, have a basket of common sense when thinking about your money. There are too many examples of investors losing thousands of dollars because they failed to question a deal that was too good to be true.”

"Diversification and common sense are vital if you want to build a stronger future"

- Sally Kolbig, Senior Financial Planner


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