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3 Essential Questions When Investing In Australia

3 Essential Questions When Investing in Australia

Choosing where to invest can be tricky if you don’t know where to start.

Young adults are getting more invested in their futures than ever before. A recent Australian Securities Exchange (ASX) study shows that the number of investors between 18 and 24 has doubled in the last five years.

One of the best ways to start with investment planning is to start when you’re young. While the age of investors is slowly balancing out, this young age can be an excellent time to get your investment plan going. Here is some investment advice you should consider before having a go at it in Australia:

Can You Afford It?

Before you set out toward financial security, you must know what initial investments you need to secure. You must be comfortable before you start investing in Australia, which means having the budget or capital.

Investment advice: Investors can contribute to investment opportunities with a lump sum deposit or regular contributions. Think about what is required of you and whether you can afford to begin. That way, you aren’t shortchanging yourself with your financial needs and wants.

Are Your Goals Clear?

Once you know where you are starting, figure out where you are going. Creating achievable investment goals for yourself will help you understand where you want to invest. 

Investment advice: Figure out what you want to be investing for: retirement, significant purchases, or just wealth accumulation. Then, determine how much you will need to meet those goals and when you want to have accomplished them.

How Willing Are You to Risk?

Any investment involves taking on risk. When you invest, you’re committing your money to a particular business or project in the hopes of profiting from the project’s success. That means accepting that you might lose all of your funding if the investment fails. 

Investment advice: Younger people tend to be more willing to take on more risk, which means they are more likely to accept these losses if their investments fail. After all, they have plenty of time ahead of you to make up for losses. However, if you start later in life, opt for more stable investments even if they yield little returns.

How Will You Diversify?

Diversification is probably the most important thing to keep in mind when building your investment portfolio if you’re risk-averse. It all boils down to the common saying, “don’t put all your eggs in one basket.”

For example, even if a residential property has seen impressive gross returns of 8.1 per cent per annum over the past decade, per a July 2017 ASX report, whispers of a cooling market float around means investing solely in one property or only in the real estate industry may be a mistake. Thus if a residential property loses value, that is the only asset affected.

Investment advice: By diversifying your investments, you can choose other assets that might be growing at a different rate while also catching the downward slide of one investment. Diversification is essentially hedging your bets by investing in various products to maintain your overall investment’s value.

Conclusion

Lastly, are you willing to wait it out? Investment isn’t about earning money quickly. It’s about playing the long game, waiting for market trends to move in your favour before buying or selling. That way, you get the best prices and maximise your gains from when you started investing in Australia.

Get more helpful investment advice from Sydney Wealth Advisers if you want to trade in Australia! Our planners and advisers will help you choose the best strategies that give you peace of mind and the lifestyle you’ve always dreamed of. Book your complimentary meeting with us now!

DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
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