Let’s face it, everyone wants the same thing from an investment – to get more money out than they put in! However, just as no two people are alike, neither are their investment personalities. Before investing it’s important to understand your investment personality. Our investment personality test can help you find out which investment is right for you.

Wise investors are those who hold several investments in all asset classes, and balance the proportion they have invested in each type to suit their needs. Investments can be simply divided into the following:

Cash: Basically it’s putting your money in the bank. Cash investments are a popular choice amongst New Zealanders. And with good reason, it’s simple to invest, easy to cash in and is usually stable and low-risk. There is a downside however; cash by itself does not make a good long term investment. In fact, of all the classes, cash investments generally have the poorest return over the longer term. Over time, inflation erodes cash investments so your spending power could actually decrease in the long run.

Fixed Interest: Remember how the rich guys in movies owned shares AND bonds? Fixed interest investments, (which includes bonds), are when you invest for a set period of time for a set amount of return. It’s sort of like an IOU from the company issuing the fixed interest investment. They agree to pay you back what you put in, plus a little more for your trouble, by a certain date. Fixed interest usually gives you more return for your money than cash.

Property: Most kiwis are pretty comfortable with this type of investment. Rental properties and paying off a mortgage are pretty easy things to get your head around. However, property investment can include commercial real estate, property development companies and new building projects. With Investment in property you can generally enjoy income from rent as well as capital growth. It’s generally accepted that property returns are more than cash or fixed interest, but with the higher returns comes increased risk.

Shares: Sharetrading is effectively buying ownership of a company, or at least part of it. As a shareholder in the company you may be paid a dividend on your shares and can watch the price move upwards (or downwards). While shares often enjoy higher returns than other investment assets, the sharemarket can be volatile. So you’ll have to be willing and brave enough to watch your investments go through highs and lows.

Interested in learning more about investing? Make an obligation-free appointment with one of our Investment Advisers or Branch Investment Specialists. Phone 0800 ASB FUNDS (0800 272 386) or email invest@asb.co.nz.