What is an asset class and which one should you invest in?

Asset Class Selection

There are three main asset classes; cash, bonds and shares.  The characteristics of each are set-out below:

Asset Class Purpose Risk Time Frame Investment Options
Cash Have money available for short term cash needs Low Short term High interest savings accounts, term deposit, cash exchange traded funds
Bonds Earn income and protect capital Low – High Short to medium term Directly through purchasing Government bonds (low risk) to junk bonds (high risk).

Indirectly through bond exchange traded funds, actively traded bond funds

Property Earn income via rent and increase the value of your investment over time through property price increases Medium – High Medium to long term Directly through purchasing a property.

Indirectly through a property exchange traded fund, a property managed fund, or through shares in property companies

Australian Shares Earn income via dividends and increase the value of your investment over time through share price increases High Medium to long term Directly through shares purchase.

Indirectly through equity exchange traded funds, equity actively managed funds.

International Shares Increase the value of your investment over time and spread your risk globally, rather than being concentrated in the Australian market only High Medium to long term Directly by purchasing shares on foreign stock exchange.

Indirectly through equity exchange traded funds, equity actively managed funds.

In our masterclass series we delve into each asset class (see links above) to explain exactly how you can invest in it, and why you may want it to form part of your portfolio.

The information in this blog is of a general nature only and may contain advice that is not based on your personal objectives, financial situation or needs. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs and before acting on the advice.

Asset Classes

What is an asset class and which one should you invest in?

Asset Class Selection

There are three main asset classes; cash, bonds and shares.  The characteristics of each are set-out below:

Asset Class Purpose Risk Time Frame Investment Options
Cash Have money available for short term cash needs Low Short term High interest savings accounts, term deposit, cash exchange traded funds
Bonds Earn income and protect capital Low – High Short to medium term Directly through purchasing Government bonds (low risk) to junk bonds (high risk).

Indirectly through bond exchange traded funds, actively traded bond funds

Property Earn income via rent and increase the value of your investment over time through property price increases Medium – High Medium to long term Directly through purchasing a property.

Indirectly through a property exchange traded fund, a property managed fund, or through shares in property companies

Australian Shares Earn income via dividends and increase the value of your investment over time through share price increases High Medium to long term Directly through shares purchase.

Indirectly through equity exchange traded funds, equity actively managed funds.

International Shares Increase the value of your investment over time and spread your risk globally, rather than being concentrated in the Australian market only High Medium to long term Directly by purchasing shares on foreign stock exchange.

Indirectly through equity exchange traded funds, equity actively managed funds.

In our masterclass series we delve into each asset class (see links above) to explain exactly how you can invest in it, and why you may want it to form part of your portfolio.

The information in this blog is of a general nature only and may contain advice that is not based on your personal objectives, financial situation or needs. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs and before acting on the advice.

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