Investments

If you’d like your money to start working for you, it’s time to learn about investing. Everyone has different needs and circumstances but here are some basics to consider. Of course, we recommend you contact us before you start putting your money into any form of investment. 

What are your goals?

Start by setting your investment goals. Since each investment will vary in its potential for risk and returns, you need to choose the right investments to help you achieve your goals:

• short-term goals—like upgrading a car or enjoying a decent holiday within the next two years.
• medium-term goals—what you want to achieve in the next two to five years, like winding down from work or home improvements.
• long-term goals—if your goal is more than five years away, like bridging the gap between an early retirement and when you can access your superannuation.

Investment strategies

As a potential investor, you can be exposed to many investment promotions every day. That’s why it’s important to understand the basics of investment strategies.

These include principles like diversification and dollar cost averaging, designed to help your investments work to achieve your goals.

Choosing the right investment option

Invest some time in making the right choices

Once you’ve put some thought into your short, medium or long-term investment goals, it’s time to look into your investment options. Certain types of investments, or asset classes, may help you reach your goals in a way that suits you.

When considering different investments, consider some key points.

Your risk tolerance

Your risk tolerance is affected by two key factors: the amount of time you have to invest and your attitude to risk.

It’s true that every investment involves some risk, but some are generally more unpredictable or volatile than others.

If you have a long-term goal, you may have time to ride through the market’s ups and downs and thereby even-out the impact of risk on your investment.

On the other hand, if your goal is short-term, you may choose to take a more conservative approach, because you won’t have the luxury of time.

But if you’re comfortable taking risks and you have big investment goals, you may decide to invest in riskier options. If you’re a conservative investor, you’re likely to prefer safer investment options, even over the long term.

The type of investment

Your risk tolerance will influence the type of investments you make:

Investment type (asset class) – General risk-return level
Cash (savings accounts, term deposits) – Low risk, possibly low returns
Fixed income (bonds, debentures) – Low risk, investments can be linked to inflation rate
Property (buildings, land, factories) – Moderate to high risk
Equities (shares) – High risk due to numerous economic and global factors

To discuss your investment needs please contact us on 03 5823 1234.