Investment

There are many types of investment vehicles to choose from, with managed funds one of the most popular choices in Australia.

Types of investment vehicles:

  • Managed funds
  • Direct shares (listed equities)
  • Investment bonds

Managed Funds

Managed funds pool the money of many individual investors. This money is then invested by a professional fund manager in different asset classes (eg shares, property and bonds) in line with the fund’s stated investment objectives. When you invest in a managed fund, you are allocated a number of ‘units’, rather than shares. Each unit represents an equal portion of the market value of the portfolio of investments. Each unit has a dollar value, known as the ‘unit price’. The unit price will vary according to changes in the market value of the investment portfolio or the total number of units issued for the fund.

Investing in Shares

A shareholding is part ownership of a listed company. The shareholder receives dividends or income from their share investment and the company is able to raise valuable equity capital to fund its growth and operations. The shares can then be sold on the stock exchange and a potential capital gain realised if the share price rises – creating an opportunity for both income and capital growth.

Investment Bonds

Investment bonds can provide you with a simple, tax-effective, long term investment. They are also known as insurance bonds, and are ‘tax-paid’ life policy investments. This means the life company pays the tax on the investment earnings, making them potentially a tax-effective way to invest.

Ways our adviser can help

As with any investment, periods when markets are down or volatile are generally not a good time to make hasty decisions. If the value of your investment has fallen due to current market conditions, remember that you are only making a loss on paper. Selling your investment would make those losses real and irreversible.

If you are ever concerned about your investments, contact Rowland Financial Advisory. We can provide clear, objective advice on how market movements may affect your investments and help to rebalance your portfolio and minimise your tax liability.