Need to know
- Know your risk tolerance: Understand how you respond to investment risk.
- Balance risk and growth: Align your approach with your goals and timeframe.
- Invest with confidence: Therèse Havenga, Head of Business Transformation at Momentum Savings, shares practical insights on making informed choices.
Just as some drivers take every opportunity to overtake while others prefer to stay in the slow lane, we all have different attitudes to risk. That attitude can carry over into how you save and invest, influencing the choices you make and how you respond to market ups and downs.
Understanding your attitude to risk can help you choose an approach that suits your savings goals, timeframe and comfort with uncertainty.
What the data says about investment risk and behaviour
Averages never tell the complete human story. They highlight patterns, not the lived experience behind every decision. Not every man rushes the gap, and not every woman brakes early.
However, behavioural research reveals distinct tendencies in how different people react to market uncertainty.
Paul Nixon, Behavioural Science Lead at the Momentum Group Digital and Technology Office, has found the following insights through research since 2024:
- Women, on average, are less likely than men to switch investments when unit trust performance makes them anxious.
- Men tend to invest more aggressively than women.
- Women are less likely to change their level of investment risk, whether increasing or reducing it.
This doesn’t mean women are better investors, or men are irresponsible. It reminds us that people experience risk differently.
Understanding the emotional side of long-term saving
Most of us like to believe we invest with our heads. We look at performance, inflation and market cycles, and tell ourselves the decision is rational. But beneath the spreadsheet, another conversation often takes place: Can I afford to lose this? Will I blame myself if it goes wrong? Am I being wise, or simply afraid?
For many individuals, money is not just a figure on a statement - it represents life stability:
- Family security and everyday school fees
- Support for ageing parents
- Dignity, independence, and personal choice
When someone approaches risk cautiously, it is often because they carry a broader web of emotional and financial responsibilities. Caution is not a weakness; patience and long-term discipline are among the most powerful assets you can have.
At the same time, extreme caution carries its own hidden risk.
Finding the right balance between risk and growth
Investing successfully means finding a balance between taking enough risk to grow your money and taking more risk than you can afford.
The risk of playing it too safe: Over time, you need growth assets to help your money beat inflation. A money market investment may feel safe, but it is unlikely to deliver the long-term growth of shares.
The risk of overconfidence: Putting everything into crypto, AI stocks or any unproven asset a year before retirement may be poor timing dressed up as confidence. Risk and growth often sit on a seesaw. Too little risk, and inflation erodes our buying power. Too much risk, and we may panic and withdraw at the wrong time.
How to discover your investment risk tolerance
Understanding how you relate to money and risk can help you identify a savings strategy that suits your goals and circumstances
- Identify your money memories: Past financial mistakes or family experiences heavily influence how you view risk today. Discover your unique financial DNA with Momentum's Money Fingerprint™, a behavioural tool designed to reveal how you approach money beyond your income and assets.
- Focus on comfortable growth: Choose an asset allocation that offers enough exposure to beat inflation while remaining comfortable enough for you to stay the course when markets dip.
- Watch the warning lights: Pay attention to market risks without letting short-term panic derail your long-term destination.
3 questions to ask when investing
These questions can help you make more informed decisions about your savings and investments.
Key takeaways
Good investing is not about pretending to be someone else. The deeper truth is that all of us invest through the lens of who we are, what we have lived through and what we fear losing.
The goal is not to become fearless. Fear makes us pause, question and prepare. But it should not drive the whole journey. In investing, as on the road, it helps to notice the warning lights. But it also helps to keep moving.
This blog post was adapted from an article seen on EBnet.co.za.
Get advice
Whether you're saving for education, retirement, a home or another long-term goal, Momentum Savings offers savings plans designed to help your money grow. Speak to a qualified financial adviser about finding the right savings strategy for your goals and enjoy savings benefits for staying invested.
About the author
Therèse Havenga
Head of Business Transformation at Momentum Savings
Therèse has over 20 years’ experience in financial services, spanning consumer insights, neuroscience, strategy, client experience, innovation and digital transformation. She holds a Master’s in Research Psychology and certifications in change management, product ownership, customer experience, coaching, and digital transformation. She is passionate about people-centred design, guiding transformation, and creating meaningful, insight-led impact.
Share this
@MomentumZA
@Momentum_za
Momentum_2
@momentumza
momentumgrouptv
