Investment Advice

Primestone Wealth - Services - Investment Advice

Investments can typically be classified as defensive or growth investments.

Defensive investments

Defensive investments are lower risk investments. They aim to provide income and protect the capital invested. Defensive investments include cash and fixed interest investments.

They’re typically used to:

  • Meet short-term financial goals (up to two years).
  • Diversify a portfolio.
Investment Characteristics Risk and investing time frame
Cash
  • Includes bank accounts, high interest savings accounts and term deposits.
  • Used to protect wealth and diversify a portfolio.
  • Risk: very low risk of losing money
  • Time frame: short term, 0–3 years
Fixed interest
  • Includes government bonds, corporate bonds, debentures and capital notes.
  • Used to earn a steady rate of income and diversify a portfolio.
  • Risk: low risk of losing money
  • Time frame: short term, 1–3 years

 

Growth investments

Growth investments are higher risk and offer a higher potential return compared to defensive investments. They aim to give capital growth and some provide income (for example, dividends for shares or rent for property). But, the price of growth investments can be volatile over short periods of time.

Growth investments are typically used to:

  • Earn a higher rate of return (but this comes with higher risk).
  • Meet longer term financial goals, five years or more.

Growth investments include shares, property and alternative investments.

Investment Characteristics Risk and investing time frame
Property
  • Includes investing in residential and commercial property.
  • Used to earn a steady rate of income (rent) and offer capital growth.
  • Risk: medium to high
  • Time frame: long term, at least 5 years
Shares
  • Investing in a company. You get to vote on management and share in the profits.
  • Offer capital growth and some provide income (dividends).
  • Risk: high
  • Time frame: long term, at least 5 years
Alternative investments
  • Includes private equity, infrastructure, commodities and other investments that don’t fall into the investment classes above.
  • Most aim to provide capital growth. Some have the potential for steady income.
  • Most alternative assets are high risk.
  • Time frame: long term, at least 5 years

 

Our Financial Advisors at Primestone Wealth assist you to understand the investment options available and help educate you on how they might assist you reach your goals:

  • How the investment works.
  • How it generates a return and the type of return expected (capital gain or income).
  • The risks involved for the investment.
  • The fees and charges for buying, holding and selling the investment.
  • How long you should invest to receive the expected return.
  • Legal and tax implications of the investment.
  • How the investment will contribute to your diversified portfolio.