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Investing In Property: Investing Basics Part 6

The Money Mummy Guide to Investing is back and this week we are going to look at the risk and return characteristics of property investments and how these could fit into your overall investment strategy.

Now as Australian’s we are renown for being in love with property.  It is easy to see why, residential property has been an amazing performer, such that we now have some of the most expensive residential property in the world.  I will have to admit, I have a bias against Australian residential property as an investment, right now.  Simply because on most measures it is simply unaffordable.  How many people do you know who are struggling to buy a property?  So despite low interest rates, in my view there is little room for property prices to keep on climbing.   (I will also admit that I said this five years ago when we brought our family home, […]

By |July 4th, 2013|Investing Basics, Investment Types|0 Comments

What Are Fixed Interest Investments?: Investing Basics Part 5

This week we are going to look at the risk and return characteristics of fixed interest investments and how these could fit into your overall investment strategy.  When you make an investment in a fixed interest product you are essentially agreeing to lend an institution (say a bank in the case of a term deposit), or a government (in the case of a government bond) or a company, money.  In return they agree to give you regular interest payments and at the end of the period they will give you your initial investment (capital) back.

Common examples of fixed interest investments include:

  • government and semi government bonds,
  • corporate bonds,
  • term deposits,
  • secured and unsecured notes
  • hybrid investments.

Generally speaking, fixed interest investments are considered to be more risky than holding your money in cash but overall are considered quite low on the risk spectrum.  But it should be noted, just because an investment is in the fixed […]

By |May 23rd, 2013|Investment Types|0 Comments

What Are My Investment Choices? Investing Basics Part 4

So now you have an idea of your risk profile (tolerance) and you understand the relationship between risk and return, it’s time to look at characteristics of the broad asset classes or types of investment.  It is important to understand the different investment types as each category has different levels of expected risk and return.  Understanding what to expect from the different asset types will help you decide which categories of investments best suit your investment goals and your timeframe.

Generally speaking, there are considered five broad investment types or asset classes:

  1. Cash – investments like savings accounts, high interest accounts, bank bills
  2. Fixed Interest – includes government bonds and bond like securities issued by companies called hybrids
  3. Property – includes residential, retail, industrial and office properties.
  4. Australian Shares – are shares listed on the Australian Stock Exchange which cover many different sectors such as mining, healthcare, banking and retail.
  5. International Shares – are shares […]
By |May 9th, 2013|Investing Basics, Investment Types, Saving|2 Comments