Where on earth should I invest these days?
“Gee oil is cheap at the moment. Might invest in an oil company. Oh wait, no its not, oh hang on, yes it is again…too hard. Better invest in gold cos that’s always going to go up and will at least keep up with inflation, oh hang on a minute, what’s happened to gold over the last 1-2 years. How could it fall in price? I thought everybody loved gold! I’ll give share trading a crack then …oh no sharemarkets have fallen too this year. Hang on they are lifting again. Might be time to get in now…flag it I’ll just buy a rental property. At least they give good tax free, capital gains (if I ignore the 90’s and global financial crisis). Oh wait, the Government is changing the property tax rules. Oh well I can still collect rents…hang on, what do you mean I might get a negative yield on my property!? Property always goes up right? Ahhh this is all too hard. I’ll just keep my money in the bank. Excuse me – what was that you said? I’ll only get paid $3,500 over the next year BEFORE tax for putting my $100K in a term deposit? What sort of offer is THAT?! And I heard the other day that might be a good deal in months to come. Hey well at least I won’t get a negative interest rate in the bank like some countries…will I? Gee maybe the mattress and a good home security system is my best investment option!”
Any of this sound familiar? Everyday seems to present a new story as to either why the sky is falling or conversely the next opportunity for getting rich because this time it really IS different…
No matter which way you might go, there are a few important things to remember when considering how to grow long term wealth and it doesn’t matter what you invest in or when or how:
- There is always risk in any type of investment. The key to successful investing is how you manage that risk
- Everything goes up and down in value so it is very important to control your short term emotions through short term volatility in a game that benefits those who maintain a longer term vision
- Easter is the one forgivable situation when it’s ok to put all your eggs in one basket. Investing is NOT. Diversification is the key to mitigating a good chunk of investment risk
- If it sounds too good to be true, it generally is. Whilst the biggest risks can sometimes return the biggest gains, be sure to get good, competent professional advice on any opportunity
- Did I mention competent professional advice? Good advice does not propose to just give you all the answers but rather is very good at asking the right questions. A competent adviser listens to YOUR goals and objectives and comes up with a custom solution for you. They DON’T force you into a ‘deal’ or try sell you a ‘once in a lifetime opportunity’.
So put simply, there is no ‘right’ time to ‘get into’ anything. And there is no one good or bad asset class. But there is good and bad advice. Do your homework about investments and seek out good advice to ultimately have the best outcome when looking at investment opportunities. Or possibly a good home alarm system and reputable branded safe…
DISCLAIMER: The above comments are general in nature and DO NOT constitute financial advice. Before making any decision, we recommend you consult a financial planner or investment adviser to take into account your particular investment objectives, financial situation and individual needs. A full disclosure statement is available on request and free of charge.