Risk and the Sharemarket
Investing funds in the Sharemarket is often quite a frightening prospect for many people. We’ve all heard horror stories about how people have lost their life savings in a sharemarket crash, but the fact is, if you make informed choices when investing, chances are your money will work for you. Obviously, though, there is always an element of risk involved. Unless you are a sharemarket whiz and are prepared to donate several hours of your time every week, the best way to approach it is to consider the investment as long term. Your financial advisor will be able to suggest possible shares that are secure and will be able to give you a steady return. In general, the sharemarket has steadily grown over the years, as shown in the chart below, and even the crash of 1987 has had little overall effect on the growth.
Growth of the Australian Sharemarket
Investing funds is an important step in managing your finances. Saving and long term deposits are important too, but the simple fact is that investing provides a much higher return. Don’t be afraid to venture into the share market, your financial advisor will lead the way.
