Need help determining your risk style?
All investments have a risk and return payoff and we all have comfort levels for how much risk we’re willing to accept. Better knowing your investment risk style means you may be better able to make investment choices suited to you.
The BT Risk Rater may help you better understand your risk style. You simply answer the following 7 questions about risk and return.Start the Risk Rater
In general, how would you describe yourself financially?
How familiar are you with investment matters?
Suppose a year ago you invested your portfolio. Today you've checked its value and find it is now worth 20% less. How would you feel?
At the beginning of the year you have a significant amount of money to invest. The options below show the performance of four possible investments over the next year. Which investment would you prefer?
Suppose a relative left you an inheritance of $100,000, stipulating in the will that you invest in ONE of the following choices. Which one would you select?
If you could increase your chances of improving your returns by taking more risk, would you be:
About this Risk Rater
When it comes to investing, we all have different attitudes towards risk. Whether investing in shares, property, fixed interest or cash you should carefully consider the level of risk involved in each investment and how you feel about that risk. For instance, you should 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.
The Risk Rater is a risk profiler to:
- Help you understand how you feel about risk, and
- Provide an illustration of how, given a particular risk profile, you could choose to allocate the money you have available for investment.
What is a risk profiler?
- One of the keys to successful investing is knowing yourself, knowing what you want to achieve and when you want to achieve it.
- Another key to investing is understanding the fundamental risk and return relationship - that the more risk you take, the higher your returns are likely to be in the long term. And the higher the long-term returns, the more volatility you may have to endure in the short term.
- This profiler draws these factors together by helping you understand how you feel about risk. It provides guidelines that may help you determine how to allocate the funds you have available for investing.
Things you should consider before using the Risk Rater
- This Risk Rater has been developed by BT Portfolio Services ABN 73 095 055 208 (BTPS).
- A risk profiler is a tool that can assist you clarify your understanding of your tolerance to risk.
- It does not provide you with financial advice about any particular financial product or class of financial product. Rather, it gives you an insight about how people with certain risk profiles may choose to allocate their funds available for investing among the major asset classes.
- The calculations you are able to carry out using risk profilers are for general illustration purposes only, based on the limited inputs you have given and assumptions built into the calculator; they are not a substitute for a detailed financial plan.
- A risk profiler does not take into account all your individual investment objectives, existing financial situation or particular needs, nor does it help you to select financial products or strategies that suit your needs and your risk-return preferences. All these should be considered before making any investment decision.
- You should also consider whether the results of the profiler are appropriate, bearing in mind all aspects of your individual financial situation. This may include existing financial commitments and other financial assets you own.
- To the extent that this risk profiler does contain general advice, you should read the relevant Financial Services Guides (FSGs).