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What can I invest in?
Asset classes
Generally, there are four major asset classes to invest in, and each of these asset classes can be divided into various investment options. They include:
- cash: primarily bank accounts (short-term savings) and cash management trusts;
- fixed interest (Australian and international): includes debentures, Government and corporate bonds, and interest bearing securities;
- property: includes direct purchase of investment properties (residential and commercial) and property trusts managed by professional fund managers; and
- shares (Australian and international): buying part-ownership in a company and benefiting from the company’s growth over time (increase in share price) and through share dividends (regular payments made to shareholders from the company’s profits).
Asset class characteristics
Each asset class has common characteristics that determine how they react to the movements of the financial market. Consequently some asset classes suit certain individuals more than others depending on an individual’s risk profile and time horizon.
| Asset class | Risk/return characteristic | Time frame |
| Cash | Low | 1-2 years |
| Fixed Interest | Medium | 3-5 years |
| Property | Medium-high | 5 years+ |
| Shares | High | 5 years+ |
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Calculators |
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Further Information |
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