Now that you know what investing is all about and why it’s important to learn more, we’re going to introduce you to your investing universe. While there are a lot of options available when it comes to investing, we’re going to guide you through some of the most accessible options when getting started.
Remember, investing can (and should) be simple. So in today’s episode, we will break down the building blocks and then use other episodes in this investing series to dive deep into shares, ETFs, managed funds and cash.
This episode is part of our Beginners Investing Month series on The Australian Finance Podcast. Just look for the episodes with the 💸 during August 2023!
✅ Check out some of the things we cover in this episode:
What is your investing universe?
- There is a wide array of things you can invest in. We’re going to run through some of the most common
- Rask Investment Philosophy: An investment philosophy is what guides you. It’s the ‘why’. Why you invest the way you do.
Cash
- Transaction accounts
- Savings accounts
- Term deposits
- Cash ETFs like AAA
- An episode later in this series will dive into this more
Bonds
- Bonds are effectively an IOU between a borrower (the issuer of the bond) and a lender (the investor who purchases the bond). Just like how putting money in your savings account is effectively an IOU between the bank as the borrower and you as the lender.
- Government, semi-government and corporate bonds
- Why do investors add bonds to a portfolio?
- Inside your super and often used by investors (via ETFs) in a diversified core portfolio
Gold
- Investors might buy this precious metal as a way to diversify their portfolio
- You can buy physically, through an ETF or a digital exchange
Shares
- Shares, also called stocks or equities, are simply part-ownership of a company.
- Publicly traded through a stock exchange, eg ASX in Australia
- You need a broker → we’ll get to that later this month
- Coffee shop example, you could have one or a million shareholders in a company
- An episode later in this series will dive into this more
Property
- When is property an investment?
- REITs, property funds, buying entire buildings (e.g. warehouses)
Alternative Assets
- Private equity
- Infrastructure – like Melbourne Airport
- Collectibles e.g. art
HOW to invest in it
ETFs
- What are ETFs?
- Core ETF types
- Thematic ETF types
- An episode later in this series will dive into more
Managed Funds
- What is a managed fund?
- As the name suggests, a managed fund is a pool of money managed by a professional fund manager. Individual investors pool money in a fund, which is then managed by a funds management company for a fee.
- Managed funds can also give investors exposure to assets and markets they may not normally be able to access
- An episode later in this series will dive into more
Super
- We’ve all got it – combines many of the things we’ve mentioned in this episode
- It’s all of the above done for you.
- There are great tax benefits, but one big risk – your money is locked away until you retire or DIE!
👀 What are we going to focus on this month?
- Shares 101
- ETFs 101
- Managed Funds 101
- Cash 101
