Guidance

Choosing investments to suit you

Choosing investments to suit you

Before you begin investing, it's a good idea to think about your financial goals and how long you want to invest for.

To get you started, you might want to consider consider questions like:

  • When do you want to reach your goals?
  • How long are you happy to have large portions of your money ‘locked away’ in investments?
  • Do you need to be able to convert your investments back to cash quickly?
  • Are you comfortable with the fact that investment returns can’t be guaranteed and you may lose money?
  • Do you want your investments to provide a regular income or do you want them to grow in value?

Your answers should help guide you to choose the right investments for you.

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
  • Property
  • Cash

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.

It should be noted that all investments come with some degree of risk, which should be considered in the context of your personal circumstances before making decisions. 


Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Past performance of any asset class mentioned in the article is not indicative of future performance. This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.