All investments carry an element of risk.

This risk is the potential for investment returns to fluctuate over time, even to the point of capital loss (loss of your initial investment). Understandably this can make some investors nervous.

Higher risk investments (e.g. international shares) tend to have greater fluctuations in their investment returns than traditionally safer, more conservative options (e.g. bank term deposits), but they generally offer the potential for greater returns over time.

More conservative investments (e.g. cash management trusts) carry less risk, with the trade-off of lower returns over the long term.

Before deciding on a particular investment option, you need to be comfortable with the level of risk or investment return fluctuation associated with your chosen investment.

To find out ways to help manage investment risk, click here.