Superannuation - Risks and rewards

NSW Commerce Stage 5 55

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Introduction

There are both risks and rewards associated with all investments, including superannuation. In this activity students interpret data to draw conclusions about the short- and long-term impact of the Global Financial Crisis (GFC) on different superannuation investments and the relationship between risk and reward and risk and age.

This activity contributes to the following outcomes.

A student:

  • applies consumer, financial, economic, business, legal, political and employment concepts and terminology in a variety of contexts COM5-1
  • analyses key factors affecting decisions COM5-4
  • develops and implements plans designed to achieve goals COM5-6
  • researches and assesses information using a variety of sources COM5-7
  • explains information using a variety of forms COM5-8
  • works independently and collaboratively to meet individual and collective goals within specified timeframes COM5-9.

Related Stage 4 outcomes: COM4-1, COM4-4, COM4-6, COM4-7, COM4-8, COM4-9

Related Life Skills outcomes: COMLS-7, COMLS-13

Content descriptions

Option 2: Investing

Investment options

Students:

  • outline the range of investment options available, including:
    • the relationship between risk and return for a range of investment options, for example, managed funds, property, shares, superannuation (ACHEK040).

Investment planning

Students:

  • consider factors influencing an investment portfolio for an individual or business, for example risk, diversification, short and long-term goals (ACHEK040)

Teacher resources

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Visualiser

Investment options and risk and reward

Student learning resources

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Explainer

Super investment options

 
Worksheet

Superannuation risks and rewards

Suggested activity sequence

This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group. The activity was written for students in Stage 5, however it can be modified to suit the needs of Stage 4 students and Life skills students.

  1. Use the visualiser to explain the relationship between risk, reward, volatility and investment options. Define and discuss the key terms.

    Key Terms

    • Risk
    • Reward
    • Volatility
    • Conservative investment options
    • Growth investment options
    • Balanced investment options
  2. As a class read the explainer, clarifying key terms and concepts.
  3. As an introduction to the student worksheet, provide students with context on the GFC:
    The global financial crisis (GFC) refers to the period of extreme stress in global financial markets and banking systems between mid-2007 and early 2009. During the GFC, a downturn in the US housing market was a catalyst for a financial crisis that spread from the United States to the rest of the world through linkages in the global financial system. Many banks around the world incurred large losses and relied on government support to avoid bankruptcy. Millions of people lost their jobs as the major advanced economies experienced their deepest recessions since the Great Depression in the 1930s (RBA).
  4. Students individually complete the worksheet.
  5. Use a grouping strategy to organise students into groups of 4. Use a discussion strategy to promote collaboration and participation, such as talking cards.
  6. Groups discuss the following:
    • Why is it important to take a long-term view in relation to super investments? Use statistics to support your response.
    • The GFC has been likened to a ‘speed bump’. Do you agree or disagree with this statement? Why or why not?
  7. Groups share their conclusions with the class.

Useful prior learning