Property, shares or other investments?
Property has traditionally been a popular investment in Australia and it is often the first option people consider when they think about investing.
However, there are many different types of investments and each has benefits and risks. You should think about how these align with your goals when choosing investments.
Most investors aim to build a portfolio over time that includes a few different types of investments. By spreading your money in this way, you might reduce the risk of all your investments under-performing at the same time.
The world of investments
The world of investments chart below is divided into the five main investment types—known as ‘asset classes’— you can put your money into:
- Australian shares
- Global shares
- Fixed interest
Shares and property are considered as ‘growth’ assets and have historically delivered higher returns on investment than so called ‘defensive’ assets like fixed interest and cash, albeit with substantially more ups and downs along the way.
The chart below also splits the asset classes into sub categories, with each one representing a level that you can invest at.
The three levels of investing
Level 1 (the outer coloured ring in the above chart): At this level you can invest directly in individual assets, such as shares in Australian or international companies, bonds issued by companies or governments, a house or a unit
Level 2 (the middle ring): This is where you can invest in sectors within an asset class, such as a group of shares from a particular industry, a stake in a portfolio of non-residential properties, or a slice of the bond market
Level 3 (the inner ring): Here you can effectively invest in an entire asset class, such as the broad Australian or global share markets, the non-residential property or bond markets.
Just starting out?
CommSec Pocket lets you invest anytime, anywhere, with as little as $50. Choose from 7 themed investment options to easily invest in something that appeals to you – like tech, sustainability leaders, or the biggest 200 companies on the Australian market. Gain experience by doing and CommSec will help you along the way with bite-sized tips, videos, and articles to teach you all about the share market.