Investment

Investment Strategies

We will help you figure out which investments will provide you with a comfortable retirement by reviewing the following:

• What your investment options are;
• How different types of investments tend to perform over long periods of time; and
• Your financial goals, so you can pick an investment mix suited to your specific retirement investment objectives and risk tolerance.

Your primary investment choices can be broken into four general asset categories: shares, property, fixed interest/bonds and cash. Though each may play a role in your long-term strategy, investing directly in shares, property, fixed interest and cash is not always easy for the individual investor.

Creating the ideal investment mix involves identifying your personal objectives and risk tolerance and diversifying your investments accordingly. That is, choosing what’s appropriate for you and acquiring the appropriate investments.

Monitoring and modifying your investment mix over a long period of time can also be a daunting and time-consuming task. Your CLM Investment Services Pty Ltd advisor will determine your profile through a confidential client data collection form and advise you of your options to achieve your goals.

Managed Funds

Professional Managed Products were created to enhance the choice of investments available to you. Managed funds pool the money of individual investors, like you, who share common investment goals. Professional fund managers use the pool money to buy investments, such as shares, property, fixed interest and cash that are consistent with the fund’s financial objective. You benefit from a diverse portfolio managed by experts.

Master Trusts provide further benefits by offering you exposure to assorted funds as well as various fund managers in order to achieve even greater diversification. The reporting from each individual fund and fund manager is consolidated and a comprehensive summary of your portfolio investments is delivered to you.

Shares

When you buy a share in a company, you are purchasing a piece of the company. Your share of ownership is also commonly known as ‘equity’. As a shareholder, you can make money in two ways; by sharing in the company’s profits (usually paid in the form of cash dividend), or by selling the share for more than you paid for it (called a capital gain). Shares don’t carry guarantees; you can lose money if the company’s share price goes down or if the company stops paying dividends. Selecting which shares are right for your investments is probably the single largest topic of research and analysis in the investment world.
There are different styles of share investment management: Growth, which seeks to identify companies whose earnings are growing at an above-average market rate and buy them at reasonable prices; and Value, which seeks to identify undervalued or out-of-favor stocks that offer exceptional long-term potential. Either management style can be appropriate for a retirement investor.

Shares are classified in many ways. You can buy company shares within an industry sector (such as banking, mining or technology), within a region (such as international or domestic), by the size of their capitalization (large and small), or by a number of other parameters.

One of the main advantages of investing in a managed fund is that you will benefit from the professional investment management the fund provides. Once you have established a type of share investment that meets your investment criteria, you can select a managed fund that matches your objectives without having to select the individual shares yourself.

Gearing Strategies

Geared investments, or investments made with borrowed money are generally designed to increase the potential for tax deductible expenses such as interest costs. The goal of this strategy is for the assets purchased with borrowed money to increase and create a profit when sold after repayment of borrowed funds plus expenses. Normally geared investments are used to buy direct property or Australian listed shares.

The main risk associated with such a strategy is that the asset you purchase will actually fall in value, even to the point where selling the asset doesn’t completely satisfy the underlying debt. This will mean that, although you might receive extra tax deductions over time, you might actually lose capital (and carry over a debt) when you eventually sell the asset. The potential to make a higher gain by borrowing exists only because of the added risk you take in using borrowed funds in the first place.