How do I know which investment option to choose?

Investment risk and finding your comfort zone

The variability of returns is known as investment risk. Generally, the higher the level of risk you are prepared to accept, the higher the potential return or loss you could experience. We all have different attitudes towards risk. Consider how comfortable you are with the possibility of losing money, or that the returns on your investments could fluctuate widely from year to year. This is a personal decision only you can make.

Diversify

Funds have a range of options ranging from conservative to aggressive. This gives you the flexibility to make changes to your investment mix if you are not happy with the level of risk you have chosen, or the returns you are getting. If your fund manager offers a diverse range of investments, you may be able to change your investment portfolio without changing your super fund.

Consider your time frames

High-risk strategies can offer higher returns and should usually be considered over a long time period. A low-risk option may suit you if you have a short investment time frame or are uncomfortable with the volatility of high-growth assets.

Check out performance

In addition, it's natural to want to know how your super has performed in the past. Many funds will provide one, three, five and 10 year performance information. But remember, past performance of an investment option is not a reliable indicator of future performance.

Find out more:

• View performance history for BT products*
• Talk to a Financial Adviser about selecting the appropriate investments for you
• Learn about different asset classes for diversification
• Understand your risk profile