Financial Literacy

Main forms of investment

There are a number of investment alternatives however, they can be narrowed down to four asset classes:

- Cash

- Fixed Interest

-Property

-Shares

Individuals can invest in these directly or indirectly through superannuation and/or managed funds. These investments can be nationally or internationally based. 

 

Advantages and Disadvantages of each aspect of the four asset classes:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The economic environemnt influences the value and income derived from all investments. For instance, in uncertain international times (e.g. the recent Global Financial Crisis), the market price of equities fall. In times of inflation, the value of money falls. Hence, what may have been considered a good return may now be unacceptable. In times of recession interest rates tend to fall and the return on investments could be considerably lower than expected. 

 

(Source: Accounting Concepts and Applications 4th edition, Phillipa Greig, Joan Mackay, Stacey Beaumont, Rosette Sanger, 2008)