Week Six Reflection

Units 11, 12 and 13 were covered this week.


Unit 11: Investing in Property

• Risk is much greater than investing in shares.
• Doesn't seem like the type of investment I am that interested in.
• Residential properties have much lower prices compared to commercial.
• High entry and exit fees for both types of property.
  
• Just because you double your money over a period of time doesn't mean you get fantastic returns.
• Returns in property seem to be unrealistic compared with the time and effort put into the investment.
• Buying an investment property at the start of a gentrification process will equal greater returns.
• Lower risk buying in an area with already established success.
• But it doesn't mean success will continue to run in the future, which nullifies lower risk.
• ATO finds many mistakes for property investments, so if I decide to buy an investment property than there would be greater stress getting my tax return done correctly.
• Investors usually only pay interest only because principle is not being taxed.
• Running cost of properties is much higher than share investments.
• Better option to use money to buy into a managed fun and let analysts diversify my portfolio.

Unit 12: Investing in Shares

• Current prices reflect consensus views.
• Online brokers are much cheaper and somewhat effective.
• Annual reports very useful information when researching for companies to invest in.
• Make sure records are kept and all documents kept for tax purposes.
• Remember that you are not actually wealthy until you have sold the shares.
• Portfolios may consist of 40-50 companies so it is very diversified.
• With margin loans both returns and losses are magnified.
• May trigger off a sale at the worst time if you get a margin call.
• It would be more beneficial to obtain multiple stock-brockers for more access to new shares.
• Be sure to get a phone service for online brokers.
• Recommended for student that 35-40% are international and 60-65% are local.
• Aim to save for very long term.

Unit 13: Other Listed Investments

• Listed property trusts are higher risks as the focus on commercial properties.
• Listed investment companies add value through research.
• Derivatives will be a good investment option for me in the future.
• Options have values which are linked to the core value of the share.
• Stay clear of warrants for 10-15 years.
• Futures will either make or lose you a lot of money.
  
• Stay clear of Contracts for Difference.