There are many type of investments and it is important to know your options.

When looking at different investment options, we often refer to asset class diversification. This looks into the different methods used within an investment to generate returns. There are many different types of investments, namely Exchange-traded fund (ETF’s) that are currently very popular; preference shares, that offer more security and means that an investors invests directly into a company; and then there are also mutual funds, bonds and money market investments, as well as foreign investments. Because of fluctuating market conditions, investors should consider looking at more conservative investments over a five year term, with a prime linked interest rate.


To determine the risk, what investment features should investors be looking at?

It is important to consider who takes responsibility, as well as what type of security it offers in terms of getting your desired returns. As such you should ideally look at secured investments, These will show you upfront what would happen in the worst case scenario and whether the interest rate as well as the investment is fixed, which in turn gives you more peace of mind.

How to understand asset allocation and diversification

Diversification is the practice of investing in different types of funds (or securities) to reduce risk. Diversification is an important part of asset allocation where it’s highly advisable to stick to the mantra of not putting all your eggs in one basket.

Factors to consider when evaluating your investment

Ask these questions:

  • What are your getting in return for the fees you are paying?
  • What do you get for the financial advisor fees you are paying?
  • Does it make sense to have an investment with such high fees?
  • What will the net effect be?

In light of the above, what is important for investors to keep in mind?

Make sure you pay attention to the net effect of fees, and also make sure you understand what the after-tax implications as well what the combined costs will be. By law an investor is entitled to insist on knowing what the net effect of all these combined costs will be and need to make sure they understand how it all works.


It is essential to get professional advice to get the best possible blend of savings and investment options. A financial advisor is best suited to help you figure out how to structure your investment portfolio to maximise returns based on your risk profile