Financial Adviser Ivanhoe
You are never too old nor too young to invest, or to seek investment advice. Similarly, the saying that it is the time in the market, rather than trying to time the market, which should always be remembered.
None of us have a crystal ball of what will happen in the future, but there are some key tools which we use when offering advice to clients, that help to deliver appropriate and risk adjusted returns over the medium to larger term.
So what exactly can you invest in and how can the GNS Team help you achieve your investment goals.
1. Cash and Bank Accounts
Relatively simple to understand, low risk, low interest rates, but your money is generally available ‘at call’ or when you need it. Great for day to day transactions.
2. Term Deposits
Again, quite a simple to understand investment, with a low level of risk, money is likely to carry a government guarantee depending on the amount. You get to nominate the term (length) of the term deposit – typically 30, 60, 90, 180 days or 1,2,3,4,5 years. The Bank will pay a fixed rate of interest for the length of the term. You can cash out a term deposit before maturity, but you will need to give the bank 31 days notice and you will also lose any accumulated interest.
With all of these strategies, your adviser should help to determine what is most suitable for your situation. At GNS Group, our financial planning team, based in Ivanhoe, have some of the most knowledgable investment advisers Melbourne has to offer. Please contact us today to book an appointment to discuss your requirements.
Generally buying a bond directly is out of reach for most of us. Most bonds trade in $500,000 amounts, although there can be opportunities to buy in smaller amounts. So what is a bond – generally issued by a Public company, a Government, or a Government agency – will be for a fixed term, have an identifiable asset as security for the bond and can offer either a fixed rate of interest or a floating rate of interest. Typically, closed as a conservative investment due to the predictability of returns, the biggest variable will be the interest rate offered. This is determined by the quality of the organisation, the type of security being offered and the length of the bond term.
If you don’t have $500,000, don’t lose heart. You can still access bond investments via a bond managed fund. Your money is pooled with other investors to collectively get far in excess of $500,000 and to be then able to have multiple bonds in a portfolio to give you diversification and to minimise risk. Your money will also be professionally managed again giving you an advantage over choosing bonds yourself.
To help you select an appropriate bond fund, talk to a GNS Financial Adviser Ivanhoe today.
4. Hybrid Shares
Are part share/equity and part debt. Usually listed and traded like normal shares, hybrids will pay a fixed or variable interest payment or an unsecured Note. Often these notes will convert into ordinary shares at some future time if not redeemed by the issuer.
Being unsecured, they will carry a higher interest rate than a bond due to the increase risk associated with them. Many investors have treated these investments as a Term Deposit on steroids, and discounted many of the risks of hybrid shares. The regulator ASIC has raised this as area of concern.
Hybrids do play an important role in an investment portfolio, but care needs to be taken, this is where a GNS Group Financial Consultant can assist. If you are based in Melbourne, we recommend coming into our offices to discuss matters further.
Most of us have shares either owned directly or as part of our super funds. Being a shareholder means you are a part owner of a business, and as a result you share in the profitability of the company. If the business suffers a loss or even a expectation of a lower profit, then your shares can decline in value and can even become worthless should he company enter bankruptcy.
It is for this reason that shares are the most volatile form of investing, but history tells us that over the longer term, share based investments perform very well.
The trade off between risk and return is something that the team at GNS Group spend considerable time discussing with clients, and should only be considered for long term investments.
Shares will also pay out some of its profits as dividends. Profits earned in Australia will have been subject to company tax at 30%, and this 30% tax can be passed on to shareholders as an Imputation Credit or a Franking Credit, this is done to avoid double taxation.
The Financial Advisers at GNS Group can assist you with both share recommendations and placing the trades for you. As a trusted consultant, this is what we do regularly for our clients.
6. Managed Funds
These are a great way to increase diversification, by pooling your money with many other investors to access investments and markets that cannot be easily and cheaply obtained directly.
Whether it be to start off with a small balance, or to get exposure to a particular type of investment, Managed Funds play a role in most people’s investment portfolio.
Besides choosing the asset class – ie (Aust/International) shares, property (Aust/International), Fixed interest (Aust/Int), cash, commodities, infrastructure etc, it’s also important to consider the style of fund manager – Growth, value, income, active, passive etc. Each have their role to play and this is where a GNS Group Financial Adviser can add real value. We will understand what your goals are and how best to reach those goals through appropriate investing.
Selecting the right consultant to help you on your investment journey can be a challenge. We pride ourselves on our ethics and knowledge and always like to meet face-to-face with our clients (if they are based in Melbourne) in our Ivanhoe offices. However, if you are located interstate, a phone call to discuss your requirements is perfectly fine.