Investment Strategy

A quality investment strategy is essential.

A solid investment strategy is better equipped to withstand market fluctuations

A diverse portfolio can help protect your wealth from market ups and downs. Every investment holds certain risks and potential rewards, but typically investments can be classified as defensive or growth investments. 

What is a good investment strategy?

A good investment strategy relies on diversifying your portfolio and assets and minimising risk.

A diverse investment portfolio can help protect your wealth from market ups and downs. Every investment, whether that is stocks, property, or something else, comes with risk. However, most investments can be classified as either defensive or growth investments.

What are the 4 types of investments?

There are many different ways to invest your money. Four of the most common and most popular investments are:

  • Shares/stocks
  • ETFs
  • Bonds
  • Real estate.

We have collated some key information on different investment types, which you can see below. Each of these investments can be utilised to create or supercharge wealth, in different ways.

Different types of investment and strategy

Growth investment options

Growth-focused investment options are considered to hold greater risk, but a higher reward ratio compared to defensive investment options. Growth investments can increase your capital and provide income, such as rental income on investment properties. Compared to defensive investment options, growth investments are seen to be a lot more volatile, with price and value tending to fluctuate regularly.

Growth investments are a great option if you want to: 

  • Obtain a high rate of return on your investment
  • Meet long-term financial goals
  • Invest in property, which tends to be safer than say, high-growth stocks.

In Australia, property has a strong record of maintaining or appreciating in value, even when other assets are on the decline. However, it’s important to remember that just because this is the trend in the past, it’s not guaranteed to continue in the same way.

With a quality investment strategy, property has the potential for strong capital growth, which refers to the value of a property increasing over time.

Alternative Investments

Value can be found in a lot of strange places...

Alternative investments are any investment that does not fall into one of the classic categories of stocks, bonds, or cash, and is not priced or evaluated in a way that is directly connected to any of these. This includes art, wine, antiquities, stuffed animals, Pokémon trading cards, or a strand of Dolly Parton’s hair!

These kinds of investments tend to be traded on an open market, or through niche brokers and  have made many people a lot of money. However, the same risks still apply.

Stocks

Stocks are key component to any successful investors portfolio.

The ability to increase your wealth in the short term and long term is one of the key advantages of investing in the stock market. Historically, the stock market has increased in value over time, despite the fact that individual stocks fluctuate in value on a regular basis.

There are a number of ways to invest in stocks and many platforms to use. A sound strategy for investment is essential. At MoneyLab, our investment experts are here to help you make savvy decisions, and grow your wealth.

When it comes to stocks, they often say that there are 5 rules for investing. These are:

  • Research, and don’t invest in companies that you don’t understand.
  • Find organisations that have an advantage in their market.
  • Maintain a margin of safety.
  • Hold, and always think long-term.
  • Know the best time to sell your stocks.

Defensive investment options

Defensive assets provide long-term stable returns with lower volatility. Examples of defensive assets are fixed-interest investment options such as bonds, and cash investment options which include term bank deposits. 

Defensive investments are a great option for: 

  • Meeting short-term financial goals
  • Diversifying a portfolio
  • Peace of mind
  • Cash – cash investments generally offer a low return compared to other investments but are considered a safe investment option.

Cash

Cash investments generally offer a low return compared to other investments but are considered a safe investment option.

Cash investments are easy to understand and very quick to action. You can set up some savings accounts and term deposits almost instantly. You can choose between a fixed rate of interest or a floating rate and these investments are considered the most secure options. 

Term Deposits

Term deposits are a low-risk way to invest your money and earn a fixed rate of interest.

With a term deposit, you lock away an amount of money for an agreed length of time (the ‘term’), which means you can’t access the money until the term is up.

In return, you’ll get a guaranteed rate of interest for the term you select, so you’ll know exactly how much interest you will receive from the bank when the term ends.

How to choose your investments

Choosing your investments is the most important decision you will make in terms of your investment strategy. It’s essential that you do your research on the different investments that are available, and understand the benefits, the downsides, and the risks.

Before investing, you should have a full understanding of:

  • How the investment generates a return and the type of return expected (capital gain or income). 
  • What the risks of the investment are. 
  • The fees and charges involved (investing is hardly ever free)
  • How long you might need to invest to receive your expected return. 
  • The legal and tax implications of the investment. 
  • How the investment will contribute to your diversified portfolio. 

It is possible to find this information yourself online. However, the best approach is to speak to an expert financial advisor. At MoneyLab, our team can present you with all of the necessary details to make a truly informed investment decision.

Simply get in touch with us to discuss the perfect investment strategy for you.

How to invest

Buy and sell investments yourself 

An advantage of investing by yourself it can be a cheaper option, as opposed to paying someone to invest your money. The risk is that you may overrate your expertise and may not diversify or achieve the results you want. It is recommended that you at least seek professional advice in the early stages of an investment to ensure you fully understand what you’re in for!

Investing with a financial adviser  

If you need help choosing the right investments, get financial advice. A MoneyLab financial planner will help you set your financial goals, understand your risk tolerance and find the right investments for you. They are the experts in finding the best type of investment to suit you and your needs. If you have an investment idea or are looking to boost your wealth, contact us, and we’ll develop the most effective investment plan catered to you.

Caution!

Investing without knowledge and understanding is just speculation and relies on luck. We recommend speaking to a professional about your financial goals and needs to ensure you make educated and composed decisions. Contact us today to speak to a financial advisor, who will help bolster your investment strategy and returns.

Our Team

Harry Matsoukas

Harry Matsoukas

Senior Financial Planner
Kim Nguyen

Kim Nguyen

Paraplanner

Speak to us about your investment opportunities

Call moneylab and one of our finance experts will be able to assist you immediately.
Winning Formula
Contact moneylab Support