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 $2.6 trillion dollars invested as at December 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

The Activist Investors Are Only Just Getting Started

The name ‘Elliott’ might sound familiar, particularly if you own shares in BHP Billiton Ltd [ASX:BHP]. The New York based hedge fund, Elliott Management Corp., took a stake in BHP 18 months ago and got to work doing what it does. That is, agitating for change. Elliott is simply the middle name of founder Paul … Read More

What to Consider When Retiring

Focusing on a number ignores the real problem that almost everyone will face in retirement…turning wealth into cash. And there’s no specific number that can solve that issue.

The Race to Become Superhuman

Cancer is ‘The Emperor of All Maladies’, as author and oncologist Siddhartha Mukherjee puts it in his best selling book of the same name. It is the be-all and end-all disease, and has the potential…

The Fight to Cheat Death

It is no secret that Peter Thiel is quite passionate about trying to extend human lifespans. He believes technology can be one of our main allies when it comes to helping humanity achieve this. And…

The UK Joins the Marijuana Boom

When the Australian government opened the floodgates for medical cannabis it set off a huge investment opportunity. Companies like AusCann [ASX:AC8] and Cann Group [ASX:CAN] have already been huge winners for investors. And we know…

How the Wealthy Protect Themselves

After the Second War World, while Europe and Asia struggled to rebuild from the devastation, the US enjoyed a never-before-seen period of prosperity. Latin America’s economy also saw a growth of 4.5% per year between…

Markets & Money