Investing
Investment
Investment decisions – businesses (to increase profit); individuals (invest savings to achieve
future goals, e.g. funding children’s education).
Financing investment – savings (for smaller investments – don’t need to pay interest);
borrowing (for larger investments – make sure you can afford the repayments + interest).
Secured and unsecured investments.
Fixed interest rate (stays the same for the period of the loan) vs variable interest rate
(fluctuates depending on the financial market).
Ethical investments – invest in companies that align with your own beliefs and values
(socially responsible).
Investment options
Investment accounts (cash management accounts, internet accounts, term deposits)
Shares (may receive dividends)
Property
Managed funds (pool of money from people with similar investment goals)
Superannuation
Debentures (documents issued by firms when you lend it a sum of money – very safe as you
are one of the first to be repaid if a firm is liquidated)
Unsecured notes (similar to debentures but less safe as you are one of the last to be repaid if
a firm is liquidated)
Risk and return
Rate of return: profit received as a percentage of the original investment.
Growth assets: higher return over longer periods, e.g. shares and property
Income/defensive assets: lower return and lower risk, e.g. term deposits.
Investment portfolio – collection of all investments that an individual has.
Investment planning
Selecting a mix of investments (spreading the risk)
Maintaining records and monitoring investments – contract note, CHESS holding statement
(records transfers of share ownership), dividend statements.
Modifying investments to maximise long-term gains – change investments according to
changed personal circumstances, changed economic conditions or the performance of the
investment.
Investment
Investment decisions – businesses (to increase profit); individuals (invest savings to achieve
future goals, e.g. funding children’s education).
Financing investment – savings (for smaller investments – don’t need to pay interest);
borrowing (for larger investments – make sure you can afford the repayments + interest).
Secured and unsecured investments.
Fixed interest rate (stays the same for the period of the loan) vs variable interest rate
(fluctuates depending on the financial market).
Ethical investments – invest in companies that align with your own beliefs and values
(socially responsible).
Investment options
Investment accounts (cash management accounts, internet accounts, term deposits)
Shares (may receive dividends)
Property
Managed funds (pool of money from people with similar investment goals)
Superannuation
Debentures (documents issued by firms when you lend it a sum of money – very safe as you
are one of the first to be repaid if a firm is liquidated)
Unsecured notes (similar to debentures but less safe as you are one of the last to be repaid if
a firm is liquidated)
Risk and return
Rate of return: profit received as a percentage of the original investment.
Growth assets: higher return over longer periods, e.g. shares and property
Income/defensive assets: lower return and lower risk, e.g. term deposits.
Investment portfolio – collection of all investments that an individual has.
Investment planning
Selecting a mix of investments (spreading the risk)
Maintaining records and monitoring investments – contract note, CHESS holding statement
(records transfers of share ownership), dividend statements.
Modifying investments to maximise long-term gains – change investments according to
changed personal circumstances, changed economic conditions or the performance of the
investment.
