Since the pandemic outbreak, we have all been spending less on clothes, holidays, and eating out. If you are fortunate enough to have maintained your income over the last twelve months, you might have found yourself with a nice little rainy day fund at your disposal. Rather than letting it languish in your bank account, earning a paltry interest rate, it would be a smart move to invest it and watch it grow. If this sounds right for you, we have a few suggestions that should help you find your ideal investment niche.
Industrial and Logistics Real Estate
When we spoke to an insider about commercial real estate in Melbourne, they said that the sector is expecting a big boost in 2021. Many offshore investors are looking to get into the Australian commercial market because of its low volatility and expected economic growth.
If you want in on the action, the best properties to invest in at present are industrial and logistics properties with extensive covenants. Experts are also expecting sustainability features such as energy-efficient lighting, solar power, and passive heating and cooling to be highly sought after in the market.
Did you know that the Australian Stock Exchange is in the top ten stock markets in the world when it comes to size? It is also fairly diverse, supported by the mining sector, tourism, agriculture, education, and a growing renewable energy market. This diversification is very attractive from an investment perspective as it spreads the risk of a slump in value.
Plus, Australia has been holding up well throughout the pandemic, with the low case numbers meaning that the economy hasn’t come to a complete standstill. We also had the advantage of having a relatively low level of debt when COVID-19 broke out. These factors mean that it is the perfect time to shop locally and buy shares in Australian companies.
An Exchange Traded Fund
If you aren’t sure which Aussie company to invest in, you could choose an ETF or Exchange Traded Fund. In this scenario, you invest in the broader market rather than a single business. The ASX is one example of a market you could invest in, but you could also choose the S&P 500, which tracks the performance of 500 large listed companies in America. The S&P is one of the most popular ETFs for investors, along with the Total Market.
With less than half of Australians on track to put away enough money for a comfortable retirement, it’s a wise idea to put some effort into bulking up your super account. Compounding interest means that the sooner you squirrel away some extra pennies, the more they will add up before you say goodbye to working life forever. If you have a Self-Managed Super Fund (SMSF), now is also a great time to talk to an SMSF accountant about how you can maximise your returns.
Before you race out to the jewellery store, we’re not suggesting you splash out on a new ring. We are talking about the big, heavy gold bars that you see in heist movies. The reason gold is so popular is that it is incredibly stable. When other markets crash, it generally holds its value or even increases. You can actually purchase a big brick of the stuff or find a gold bullion depository that offers you a savings plan to deposit money weekly or monthly.
Do your research and choose wisely as no investment comes without risk. Play your cards right, and you could be watching your pennies grow exponentially thanks to the wonders of compound interest.