Most people would probably say they are investors. However, volatility in the markets over the past year or so is testing investors' resolve and revealing many closet speculators.

Investors face an escalating crisis in Europe and slowdowns in the United States, Australia and China. Making it worse, this unsettling outlook follows a period of poor investment returns. Share markets are plunging once more and government bond yields in Australia and the United States are hitting record lows. Andrew Pease, Chief Investment Strategist, Asia Pacific, reveals why equities will bounce back.

If you're thinking of making a change to your super investments, you need to make sure that the investment options you choose are right for you.

Whether you’re a new or experienced investor, the temptation to chase short-term returns can be hard to resist. This table illustrates how different asset classes have performed relative to a multi-asset portfolio diversified across multiple assets, strategies & managers (with an average exposure of 70% growth assets).

Different asset classes – like shares, bonds and property securities – carry different levels of risk and return. Investing in a single asset class is risky when you consider no one asset class consistently outperforms on a regular basis.

Most Australians are invested in the sharemarket as part of their superannuation savings. The average super investment will comprise a mix of shares, government and corporate bonds, cash, and some 'alternative' asset classes such as property and commodities. This means any volatility in the sharemarkets will be felt to some degree in superannuation.

Andrew Sneddon, Portfolio Manager, discusses how Russell used alternative assets to protect portfolios from falling share markets. He also covers what Russell expects from markets as we head into 2012.

For every investor that sees markets drop and thinks to themselves "I have to sell", there is another thinking "what a fantastic opportunity to buy cheap".

If you are transitioning to retirement or are in retirement, there are still many years ahead for your savings to remain invested. So, try to avoid making hasty decisions.

How you react to volatility will ultimately affect your investment balance. So, try not to be swayed by short-term market fluctuations.