Risks & Rewards

All investments have potential risks and rewards. Investment reward is measured by your investment's total return and reflects how much your investment grows over time. Investment risk is measured by the fluctuations of your investment's total returns and reflects the possibility that your investment may not grow as expected, or even may decline in value.

Risk and return have a direct relationship. Often, investments that have a higher level of risk may offer greater rewards, while investments with a lower level of risk generally offer lower rewards.

Time also plays an important role in investing because it can reduce your risk. Over time, the highs and lows associated with any type of investment should balance out.

Managing the Risks and Rewards of Investing

Below you will find several strategies to help manage, but not eliminate, the risks you face when choosing your OPERS Investment Options and directing your individual account.

Invest Long-term

Total returns have been more consistent over longer periods of time. Smart investors, with a long time to invest, are willing to ride out the short-term fluctuations in their investments because of the potential for longer-term gains.

Try not to let the ups and downs of the stock market reports distract you from your goals. It is smart to be a long-term investor when planning for retirement.


Diversification simply means "don't put all your eggs in one basket." Why? Because it has proven impossible to predict which investment will do best over a given period of time. So, by spreading your money among different investments, you reduce the impact of any one investment and lower your risk.

The best way to diversify is different for each investor, based on the risk you are willing to take, the rate of return you desire and the amount of time left before you retire. With these specifics you can spread your savings among different classes of investments to minimize risk and help meet your goals. This is called asset allocation.

Asset allocation is an important influence on the return of your investment portfolio. Asset allocation has been shown to account for over 90 percent of the fluctuation in your investment return. This means that the selection of asset classes is more important to your total return than the specific investment themselves

Avoid Pitfalls

Selecting investment options requires a steady hand and a clear head to reduce your chances of making investment mistakes.

Building your retirement savings takes time, so try not to be discouraged when your account balance increases slowly. Try to stick with your investment mix until the next time you evaluate your situation.

Your situation and personal needs are unique. Be sure to learn about the OPERS Investment Options and decide where you want to invest your contributions according to your own situation and Investor Profile.

Some investment pitfalls include: