What are the different investment assets?
An asset is anything you own that has value. In the investing world, assets include shares, property, bonds and cash. Each asset class may have a place in your investment strategy. Having a basic understanding of asset class investing puts you in a better position to choose where to put your investment dollars.
Shares
When you buy shares, also known as equities, you buy ownership of part of a company and share in its future. Shares are considered a growth asset, which means they offer potentially high asset class returns. But share prices can also experience dramatic highs and lows over the short term. You can invest in international and Australian shares.
Property
Like shares, property is considered a growth asset class, offering the potential for high asset class returns on both capital growth and income. But you don't have to buy a whole house to invest in property. You can invest in listed property investments that are managed property assets. By doing this, you can have a growth asset that is still relatively easy to buy and sell and gives you exposure to the property asset class.
Bonds
Bonds are also known as fixed-interest securities. They guarantee to pay a pre-determined regular amount of money, and repay your investment at a pre-set date in the future, known as the maturity date. Bonds can perform better at different times of the economic cycle, so they can help you diversify your portfolio. Bonds are generally regarded as a lower-risk asset class investment than shares or property.
Cash
Cash investments are not limited to putting money in the bank. Cash management trusts are managed funds that invest in cash, usually the short-term money market. They offer similar security and access as bank savings accounts, but often at a better rate of interest. However, if you leave your investment in cash for too long, your gains may be eroded by inflation.
Learn more about Basics
- When should I start investing?
- What types of goals do I need for investment setting?
- What are diversified investments?
- Where to invest: What are the investment assets?
- What are the investment traps?
Did you know?
It’s never too early to start investing money. In fact the earlier you start investing, the more time you have in the market to increase your chances of higher returns on your investments.
Investing in a diverse range of assets, can help soften the impact of a loss in value of one particular asset.
