Investing

What’s the point in investing?

Investing is the process of providing money now, in return for some future profit.

The most common reason for investing in the western world is to save for your retirement.

And the industry is huge!

Superannuation in Australia has a record $2.3 trillion dollars invested as at March 2017.

This money is the combined savings of every employee or retiree that has ever contributed to a retirement fund in some way.

Different types of return from investments

An investor makes a return on their investment in two possible ways.

The first way is through income.

Products such as cash and bonds offer interest income as an incentive for investors to loan or deposit money.

These returns are either fixed or variable.

Generally the higher the interest rate, the riskier the loan. Though most cash and fixed interest products are relatively safe assets.

That is because your capital, the amount you originally invest, is usually returned in full.

The second way of making a return is through capital gains.

Shares and property are the two main asset classes that offer this possibility.

A capital gain is simply the value of your original investment going up over time.

But be aware that the possibility of losing money is also present in such investments at a comparatively high degree.

Some assets offer both type of return.

For example, a property combines income in the form of rent along with a possibility of capital growth over time.

Similarly, a lot of stocks pay part of their profits back to shareholders in the form of dividends.

Individual investors choose different investments based on different goals and opinions.

You should always make sure you invest according to your individual preferences. And make an effort to understand the risks and returns of your investment portfolio.

Our editors and analysts here at Port Phillip Publishing often write about investing and investments. But you won’t find the same tired analysis here as in the mainstream press.

We pride ourselves on our independence and on never following the crowd. You can find all our articles on investing on this page.

Read more
airline stocks
Airlines to Enter Another Bad Century?
Some would tell you to go into the airline industry. It’s extremely competitive. Travelers usually pick their flights based on price. So for many air carriers, it’s a race to operate at the cheapest price possible.
markets and controlling your investments
No Margin for Error
The wisdom of the old saying ‘banks give you an umbrella when the sun is shining and take it away when it’s raining’ is forgotten when greed — by all parties in the transaction — is in the air. When it comes to investing, there’s a well-recognised equation: the higher the market, the lower the investor IQ.
warren buffet
Why Buffett’s a Broken Clock on Bitcoin
Warren Buffett admits he doesn’t know anything about bitcoin, but still predicts they will end badly. Unfortunately for his legions of supporters, the ‘Oracle of Omaha’ has a track record of missing out on big tech trends.
stocks to buy on ASX
500 Stocks The Aussie Market Has Forgotten About
As investors, we want to make sure that we don’t have too much of our holdings tied up in growth only stocks. And this is where income stocks fit into the picture. Of the 2000 or so stocks listed on the ASX, only around a quarter of them pay any dividend.
bitcoin price crash
Bitcoin Price Tumbles on Clampdown
The bitcoin price has tumbled since the beginning of the week. In the last 48 hours, the price of bitcoin has dropped over 15%, to a low of US$14,365.88. At time of writing bitcoin is recovering.
India economy set to boom
India: The Investment Hotspot to Watch
There’s no question that spotting growth in emerging countries — economies in need of our resources — at the right time is a huge opportunity for Australian investors. India is now the world’s fastest growing economy, and will likely be for many decades to come. It’s growing at a brisk 7% per annum - Good news for them. And good news for you.
Australian property market
How to Own Almost 200 Properties
It’s not the number of properties that makes you rich; it’s the percentage you own. For example, imagine two investors. One owns 20 properties, the other owns three. Who’s better off? To decide, we need more information.
bear market approaching
Beware of the Bear Market
Wherever you looked in 2017 it was all bull…not a bear in sight. The Dow hitting records highs. Bitcoin…well, what can you say that has not already been said about this phantom phenomenon: Aussie house prices. When markets are at their most exuberant is when you should be reminded of how nasty bear markets can be.
risk in the financial markets
Where the Real Risk Resides
Individual investors aren’t a systemic risk. Individuals don’t have a large enough access to borrowed capital (loans) to create that risk. The risk, as always, is in the hands of the know-it-alls and big heads on Collins Street, Martin Place, Wall Street, and in the City of London.
sectors that could boom in 2018
Three Sectors That Could Boom in 2018
With the Trump tax cuts likely to prop up confidence and the US economy, I think you should have at least a part of your portfolio in some speculative sectors. If the bull market does run through 2018, you want to make sure you’re making hay while the sun still shines.
building long-term wealth
Three Simple Habits for Building Long-Term Wealth
We sell investment research, analysis, and advice. And our marketers work hard to make our services sound as attractive as possible. But when you don’t have much money to invest, an expensive investment advisory service will probably not help you. For anyone beginning to build wealth, we have some million-dollar advice that we will give to you for nothing.