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It's important to arm yourself with a solid understanding of investment basics, so that you and your financial adviser can define a strategy that suits your needs and goals.

1. Getting started

Consider these simple strategies to help you take control of your investment and minimise your exposure to risk:

  • Diversify, diversify, diversify - by spreading your money across different asset classes, regions, sectors and investment managers, you can increase your chance of having some exposure to the best-performing investments.
  • Smooth a bumpy ride – by investing a set amount regularly, you remove the emotion from the investment decision and ensure you don't get caught up in the market hype and 'noise'. It also helps you to avoid buying when the market is peaking or selling just before a boom.

2. Understanding risk

All investments carry some level of risk. The key is making sure you make the right decisions based on your individual circumstances, and take into account the level of risk you are willing to take on as this will play a key role in selecting your investment options. In consultation with your financial adviser you should consider:

  • Your investment goals
  • Your expectations for returns
  • The length of time you can hold your investment
  • How comfortable you are with fluctuations in the value of your investment.
     

The risk profile you choose reflects your perception of the acceptable trade-off between risk and the reward required for taking on that investment risk. Consider which risk profile fits you:
 

  • Conservative – an investor who seeks to protect their accumulated wealth and is only prepared to accept a relatively low level of risk.
  • Balanced – an investor who seeks an investment that provides a mix of income and growth, should be stable in value over a 3-year period, but could fall in value by 5-10% within a year. Over the long term this strategy could provide a return of 6-8%.
  • Growth – an investor who seeks more growth than income with an overall investment portfolio that could provide growth of 8-10% over the long term. The flip side is that in any one year it could fall by as much as 20% in value.
  • High Growth/Aggressive - an investor who predominantly seeks growth assets that could provide returns of greater than 10% over the long term. The flip side is that in any one year it could fall by greater than 20% in value.

3. Market volatility

Markets and economies move in growth cycles - from boom periods to events like the global financial crisis. Of course, the past performance of share markets isn't an accurate way of predicting what will happen in the future, but based on history, we can be reasonably certain that markets will again recover in time after a downturn.

4. Prices and performance

A key step to evaluating an investment option involves looking at its past performance.

A BT Adviser can help you create a personalised plan tailored to your financial situation and goals. Call 1800 209 291 to speak to a BT Adviser or request a call back and we'll contact you at a time that suits.

Things you should know

Westpac Financial Planning FSG (PDF 107KB)

BT Advisers are representatives of Westpac Banking Corporation ABN 33 007 457 141 AFSL & Australian Credit Licence 233714 (Westpac). BT is a division of Westpac. Conditions, fees and charges may apply. These may change or we may introduce new ones in the future. Full details are available on request. Lending criteria apply to approval of credit products. This information does not take into account your personal circumstances, so you should consider whether it's appropriate for you. View Westpac's Financial Services Guide (PDF 107KB). This is an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. Read the disclosure documents for your selected product or service, including the Terms and Conditions or Product Disclosure Statement, before deciding. Unless otherwise specified, the products and services described on this website are available only in Australia from Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. Information current as at March 2016.