Each week across the ACM network Ali and Gaby Rosenberg offer quick tips for big wins in understanding your money. The sisters are co-founders of the Blossom micro-investing app.
A few weeks ago, we talked about our love of diversifying, because we believe extreme anything is unsustainable (We love what we do, and also the first to call each other out for working too much).
Achieving a healthy balance across all your investments means understanding all your options. From ASX to art, here's a whistlestop tour of the main investment categories - also known as Asset Classes - and if you already know or invest in them, consider it a quick check-in on your exposure.
Equities/Stocks: These are publicly traded companies listed on the Australian Securities Exchange (ASX) or international stock exchanges. For context, about 45-50% of the world's wealth is invested in this category. You can invest directly, or through Exchange Traded Funds (ETFs), which is like a basket of securities.
Bonds: Fixed-income securities issued by governments or corporations, with regular interest payments. It represents around 25-30% of global investment and includes government bonds, corporate bonds, and municipal bonds.
Property: This covers all real estate - residential, commercial, and industrial property, as well indirect investments, i.e. property funds and real estate investment trusts (REITs).
Cash (or Cash Equivalents): Term deposits, savings accounts and other highly liquid assets that can easily be turned into cash when you need it.
Commodities: This is your category for physical goods like gold, silver, oil, wheat and coffee, and you can invest directly, via future contracts or through funds.
Cryptocurrencies: Despite all the chat, crypto currently represents about 1% of the world's wealth, and covers digital currencies such as Bitcoin and Ethereum. Blockchain technology is the digital ledger system.
Collectibles: Tangible assets like art, antiques, rare coins and stamps.
Derivatives: This is one of the more complex categories and includes options, futures, and swaps. These are all financial contracts, with a value based on an underlying asset, index, or rate.
Managed Funds & Mutual Funds: Funds managed by professionals, who can spread your money across a mix of asset classes.
So go explore! And keep it healthy.
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Sisters Ali & Gaby Rosenberg are the co-founders of Blossom App.
- Nothing in this article should be construed as being personal financial advice. It is general in nature only and has not taken into account your particular circumstances, objectives, financial situation or needs. You should consider whether the information, strategies and investments are appropriate and suitable for you or seek personal advice from a licensed financial planner before making an investment decision. Past performance does not indicate future performance. BlossomApp Pty Ltd (ABN 74 644 216 151) is a C.A.R. (No. 001284228) of Gleneagle Asset Management Ltd (AFSL 226199). Consider the PDS and TMD at blossomapp.com to ensure the product suits your needs.
- ACM co-owner Alex Waislitz has a stake in a company that provides services to Blossom. ACM is the publisher of this masthead.
