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What are my options when it comes to investing?

There is so much more to investing than stashing your money in a savings account. In fact, while cash is a very safe asset, it also delivers low returns.


What are my options when it comes to investing? What are the risks?

With a wide range of asset types that you can choose to invest in, it’s worth understanding the different options and how they can help you achieve your financial goals.

Different investment choices

Your Mortgage Choice financial adviser can help you decide the mix of assets (or investments) best suited to your needs. To get started, let’s take a look at the main types of assets you could invest in – and the pros and cons of each.

Main investment options

“Cash” includes savings accounts, cash management accounts and term deposits. All cash investments are very safe with a low risk of losing your money. The downside is that returns on cash tend to be very low, and you won’t enjoy the benefits of capital growth.

These assets provide a regular income stream, usually in the form of interest payments. They can be actively traded and have the potential for capital growth with their market value varying as interest rates change. An example of a Fixed Interest asset is a Bond and they are generally considered low to medium risk investments.

Investors can choose to own residential property as well as commercial property (e.g. retail premises and factories). Both types of property can deliver ongoing rental income and long term capital growth. Property values can rise and fall over short term periods, so holding onto your property for the long term, at least seven years, can help to minimise this risk.

Instead of having to purchase an entire property on your own and tying up a large proportion of your money, another way to invest in property is through a property trust known as a Real Estate Investment Trust (REIT). A REIT is a simple way to invest in property as it sees many investors pooling their funds together with a professional manager to invest in a portfolio of different properties.

It’s relatively easy, and very affordable, to own a stake in some of Australia’s largest and most successful companies. It doesn’t take much cash to get started, and as a shareholder you’ll be entitled to receive dividends - a slice of the company’s annual profit - when they are paid. Along with dividend income, you also have the potential to make a gain on any increase in the price of your shares when you sell them.

Infrastructure assets include investments in physical assets (e.g. toll roads, airports) and also services (e.g. electricity, gas and water). These assets generally have a stable cashflow as well as the potential for achieving capital growth. 

Alternative assets are non-traditional investments that do not fit within one of the above types of assets. They include things such as private equity funds, hedge funds and commodities (e.g. Gold and Silver).

Weighing up risk

All investments have an element of risk, and each type of asset carries with it a varying level of risk, however with that risk comes the potential to achieve a higher return. It’s important for you to be comfortable with the level of risk involved with your investments.

The two ways to think of risk are:

  • Your comfort level with risk, and
  • Your ability to take risk based on your personal circumstances.

Your Mortgage Choice financial adviser will help you decide the level of risk that is right for you, and then recommend an appropriate mix of assets.

With your portfolio in place, your adviser can help you track your investments over time so you understand how they are working to help you achieve your personal goals.


Get started with investing

Many Australians hold investments but have you ever stopped to wonder if your portfolio is really working in your favour? Professional advice takes the guesswork out of investing.

This quick video gives you some insights into getting started with investing.

Talk to your local financial adviser today

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