ARTICLES > Investing - Part two.
 |
0800 50 44 44
|
|
|
What Can I Invest In? This is the second of a four part article on investing. Parts one and two are from the July 2011 FORTIfi Client Newsletter. Parts three and four will be in the August 2011 FORTIfi Client Newsletter.There are various types of investment, we’ll look at five of them; ► Banking. These tend to be short-term, low-risk, high liquidity. We put our money in and accept whatever return the bank offers us. Over a period of time even relatively low interest rates can yield a return that’s worth having. Make sure you shop around for the best interest rate for your savings, even considering different account packages from within your existing bank. ► Bonds. If you have a lump sum to invest you can purchase government or company bonds. It’s like loaning your money so that it can be used to build someone else’s business. Meanwhile, they promise to return the money, plus interest, to you in a certain period of time. The thing to remember with bonds is that, while they tend to be low-risk, they are also usually low return and they lock your money away for the loan period, which can be quite a long time. New Zealand Government bonds are known as Kiwi Bonds. The minimum you can invest in any single issue of Kiwi Bonds is $1,000 and the most is $500,000. They are bought and sold through brokers. Further information on Kiwi Bonds and the history of the returns that can be made are at www.nzdmo.govt.nz. ► Property. Many New Zealanders are investing in property. While it is not always as safe an investment as people might think, it is generally fairly low risk provided you remain aware of one important factor – property investment is usually only viable if you are prepared to invest for the long-term. ► Shares. In some countries shares are referred to as stocks. Hence, shares and stocks are the same thing, just as a share-broker and stock-broker are the same. Buying shares in a company is like being part owner of that company and, as such, you reap the benefits of any profits made by the company. Of course, it can work the other way also. If the company returns a loss, then you also receive a loss on your shares. ► Managed Funds. It's possible to hand your funds over to professionals who will do the investing for you. One way most people do this is through a superannuation fund. The money you pay into such a scheme is not just left in the bank. It's invested by qualified people in a variety of investment types and places. This is a great way, for those who don't understand the intricacies of hands-on investment, to get a greater return on their money than they would if they simply placed it in the bank. Click here for Part One of FORTIfi's series on Investing. Click here for Part Three of FORTIfi's series on Investing. Click here for Part Four of FORTIfi's series on Investing. |