Chapter 5: Types of investment
Many different types of investment are available for your SMSF. One of the most difficult decisions you will face when managing your portfolio is which assets to buy and sell, and in what proportions. In this chapter we will look at the various asset classes that you might consider when constructing the investment strategy for your SMSF: cash, fixed interest, shares, property and derivatives.
Income and growth
There are two reasons we want to buy assets for investment: income and growth. The sum of these two attributes equals your total return. The conundrum is that each asset class attracts different rates of return over time. Cash is relatively stable but barely keeps up with inflation, though it will provide ...