As the inflation curve rises in Australia, you would be looking for an additional source of income to outpace inflation. Hence, you are considering the investment options offered by investment companies. However, you are uncertain whether the Australian Investment Company is suitable for you?
This post answers all of your questions! Australian Investment companies are ideal for you if you plan a long-term investment and are ready to take risks. In addition, all of your funds are managed by industry experts.
In this post, the option of investing through an investment company is comprehensively discussed. Read on!
Table of Contents
Investment Plans Offered at An Investment Company in Australia
Investment Companies in Australia invest on behalf of their clients and share profits and losses throughout. The most common types of investment plans offered by an investment company in Australia are the following.
Mutual Fund
In mutual funds, companies gather money from the investors and use it to invest in stocks, bonds, and short-term debts. Professional money managers look after the investments and work towards producing returns for the investor’s funds.
UITs
Offered via IPO or Initial Public Offering, Unit investment trusts invest in stocks, bonds, and other securities. UITs are unique because they have a set termination date. The UIT portfolio is terminated once the maturity hits and the investors receive their shares of net assets.
Closed-end Funds
The Closed-end funds offer a limited number of shares to the market. They are also provided by IPOs and trade daily for exchanges.
Based on income-producing investments, these funds are regularly distributed to the clients.
Is An Investment Company suitable for you?
Before engaging in any investment in Australia, you need to learn the thumb rule:
All investments come with a usual risk, such as losing money or seeing your investment decline.
If you are through with this rule, investment companies are undoubtedly suitable for you. Secondly, consult a financial adviser to know whether investment companies are an ideal choice for you.
Around 6.48 million Australians own investments either directly or indirectly. Thus, even if investment companies are not the right choice for you, you can find different means of investment.
You can use the pointers below as a checklist to understand whether investment companies are right for you.
Investment companies are suitable for you if you want:
- Income rising consistently over a while
- Robust growth in your investments in the long term
- An independent board safeguarding your interests
- Access to alternate assets
- The capacity to buy and sell shares
If you have the following motives, you may want to look at other investment options in Australia.
- The investment time horizon of less than five years
- Need a guaranteed income and return
- Can’t take risks
- Looking for an investment where the price always matches the value of the underlying assets.
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Benefits of Investing Through an Investment Company in Australia
Investing through an investing company in Australia can bring a plethora of benefits for you. Listed below are some of the benefits.
- Diversification: Investment companies in Australia invest in a diverse range of investments. Thus, the risk is spread to diversify the portfolio with little effort. The risk gets limited in a volatile market.
- Professional Management: All of your investments will be managed by industry experts.
- Affordability: You can invest in greater projects and reap considerable benefits as money is pooled in from several small investors.
- Beat Inflation: Investing in assets with the help of the investment companies, you can outpace the rising inflation observed in Australia.
- Earn Additional income: The return of your investment can prove to be the source of additional income.
If you want to beat inflation and add an additional source of income, investing through an Australian Investment Companyis ideal.
The risk is diversified, and all of your investments are managed by the top industry experts. The only factor you should consider and always keep in mind is that all types of investments carry risks.
Want to plan long-term investments? Consult finance professionals and start your investments with an investment company today.
