Investment class #3: Cash and near-cash investments
You don’t want all of your money to be exposed to shares – and the voltatility they hold. But instead of putting your money in a fixed deposit you can get higher returns.
I still like the Government Retail Bond.
Right now, you can get a 8.25% annual rate on it for a 2 year fixed period. If you’re willing to invest for 5 years you can get an annual rate of 9.25% on it. That means a five-year return of 55.6%.
Now that won’t make you rich. But it is a very satisfying return considering the low risk with a government bond – when compared to shares.
Investment class #4: Alternative investments
Alternative investments include everything from commodities and coins such as golden Kruger rands, to property, crypto-currencies and art.
I prefer property to start out with in the ‘alternative’ investment sphere.
Then, you take your rental income from properties and invest that into gold and other investments.
Splitting your investment portfolio up like this means that no matter what cycle the market goes through you will get decent returns.
The fact is trying to time the market to switch between different asset classes through each cycle more often ends up in high trading costs and missed opportunities.
Here’s to unleashing real value
Editor, Red Hot Penny Shares
PS. If you’re looking for some great local shares, then I highly recommend you take a look at these three local stocks right now.