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 […]