Newspaper article The Observer (Gladstone, Australia)

Wake Up to Share Returns

Newspaper article The Observer (Gladstone, Australia)

Wake Up to Share Returns

Article excerpt

YOU can't take it with you -- this is why my wife and I have just been enjoying a cruise in the Galapagos.

Most passengers were relaxed about investment markets but one stopped the conversation with "We like to sleep at night -- that's why we don't have any shares".

On the face of it, it's a reasonable attitude given the present volatility of the markets, but most of us couldn't sleep at night if we didn't own shares.

Now it's a good feeling to have cash in the bank, even though the best return is around 3%. But it has no tax benefits, no chance of capital gain and is eroded by inflation. Getting $3000 on a deposit of $100,000 may sound safe but take off 3% for inflation and you are left with a net return of zero. Holding cash long term is one of the worst investment strategies.

This leaves us with the old faithfuls -- property and shares. It's important to have an interest in both and to understand they behave in different ways. …

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