• Introduction
• Editorials
• Q&A

Thanks to the miracle of compound interest and the wide range of opportunities available today, anyone can be a successful investor if they make the right choices.

‘Compound interest’ refers to the potential for your money to grow faster as you earn interest on your interest. It explains why $1,000 invested at a rate of 8% pa after tax can grow to $47,000 over 50 years. No wonder Albert Einstein described compound interest as one of the greatest human discoveries.

But there are important choices before you start. What do you want to achieve? What is your timeframe? Are your goals long term, like retirement, or more immediate, like home renovation or a holiday?

These choices help determine the investments to consider, the risk you might take and whether strategies like gearing (borrowing to invest) suit you.

For example, shares are suited to longer-term investors. What allocation to shares would match your goals? How will you decide? And what about property? Again it depends on your needs. Property markets follow cycles with significant booms and the occasional bust. Should you consider property or other investments?

Determining the right balance of investments is not easy. Any good financial adviser can help you understand the options, avoid costly mistakes and make smart choices.

Make an enquiry or see an adviser now, call ipac on 1800 626 881 or log onto www.ipac.com.au.

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• Understanding investment performance
• Gearing
• Capital gains tax
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Should I focus on property or shares? What investments are right for me?

The investments that suit you will depend on factors like:

• - your objectives
• - how much risk you want to take
• - your age and timeframe for investing
• - whether you want a ‘hands on’ role in your investments

Property and shares can both play a role in investing for the long term. But everyone’s situation is unique and your financial adviser can help you decide on a strategy to suit your needs.

How can I manage investment risk?

Investment risk refers to the possibility of losing money, whether in actual dollars or ‘on paper’. Generally, the highest-performing investments involve the highest risk. The most effective strategy for managing risk is to diversify widely so your portfolio has protection against investments that don’t do well, plus exposure to a wide range of attractive opportunities. This may mean, for example, spreading your money across property, shares, bonds, cash and other investments. Your financial adviser can help you allocate your money according to your situation.