If an Investment Portfolio is of interest, the next step is to determine which type of investment will be suitable for you.
There are four different types of investments, these include:
High Interest Savings Accounts is a low risk investment. It provides stable and predictable interest payments. However, if the economy experiences inflation, the value of the cash could decrease as the cost of goods and services increase.
Term Deposits earns fixed interest (usually higher than a transaction account) on the money deposited. In order to earn the interest, the deposit has to stay untouched for a period of time -a penalty may apply if money is withdrawn prior.
Shares are units of ownership in a company that are commonly bought and sold on a Stock Exchange. Shares are the most risky type of investments as prices can fall dramatically – causing money loss.
Purchasing Property to rent out is a popular form of investment. Benefits may include; income from rent, tax deductions and property can increase in value. However, selling property may take time – difficulty in accessing money quickly.
Most investors aim to have a variety of investments. Doing so, can reduce the risk of all investments under-preforming at the same time.
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