Docstoc

Ways To Invest Money

Document Sample
Ways To Invest Money Powered By Docstoc
					Ways To Invest Money
There are many ways to invest your money. The best way to look at the
different investments available is by asset class. Classification makes
it easier to understand segments of investments. There are no definitive
rules to breaking each into a segment but it will help you evaluate and
compare investments.
Property
Property is an asset class, and property can be divided into commercial
property, residential property and rural property. Each of these is a
segment of that asset class. When comparing segments you can look at
rates of return and investment capitol required. This will help you
decide which segment is best for you.
Listed Property Trusts
Listed Property trust or LPT managers invest in a portfolio of investment
grade commercial real estate to generate high yielding returns for
investors, along with buying and selling properties in line with their
investment strategy. They are a listed vehicle that can be purchased on
the stock exchange.
Australia's model for LPTs is a recognised world leader. From less than
$5 billion in the early 1990s, the sector reached a market capitalisation
of $33.3 billion in December 2000, invested in property assets of $46.3
billion. The LPT Index is the fifth largest sector on the ASX, accounting
for 5.6 percent of the All Ordinaries Index.
Mortgage trusts
Investors are able to invest in mortgage trusts. These invest in
mortgages over residential or commercial properties, Mortgage trust have
an advantage for investors of being able to redeem funds at short notice.
For this reason, they remain a simple and popular alternative to cash
management trusts and fixed term deposits.
Shares
The Australian Share market is divided in segments and each share is part
of an index. This is a good way to compare shares and performance of
those shares. GICS was developed in response to the global financial
community's need for one complete, consistent set of global sector and
industry definitions that reflects today's economy and is flexible enough
to change as the investment world changes. The industry groups under the
GICS system are;
• Consumer Discretionary
• Consumer Staples
• Energy
• Financials
• Financials excluding Property Trusts
• Health Care
• Industrials
• Information Technology
• Materials
• Property Trusts
• Telecommunication Services
• Utilities
This makes it easier to make comparisons.
Managed Investments
Managed Investments offer investors exposure to a professionally managed
portfolio of assets through a single security. Investors own a proportion
of the investment portfolio commensurate with the size of their
investment, and are entitled to any profits and distributions
(dividends), but also subject to losses should the value of the portfolio
decline.
To compare these managed investments you should look at the financials of
each, but a major consideration will be the managed expense ratio of the
investment. The MER is the fee paid by the investor in an investment fund
to the manager of the fund. The MER is normally expressed as an annual
percentage or "basis point" charge (where one basis point equals one
hundredth of a percent).
When looking for investments and comparing them, make sure you break each
vehicle down into asset classes and segments. It makes for easier
comparisons and financial evaluation.
For further information on ways to invest money visit
http://www.waystoinvestmoney.freedvd.com.au
James McInnes is a professional share market trader and investment
entrepreneur, with many years experience trading the Australian Share
market. You can visit his site at
http://www.waystoinvestmoney.freedvd.com.au for further information on
trading the Australian Share Market.

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:7
posted:10/11/2010
language:English
pages:2