Property or portfolio?
As property becomes harder to access, investors are looking at alternative paths to build wealth while retaining flexibility, says Fraser Allan, Head of Premium Client Management, CMC Markets, Australia & New Zealand.
BRANDVOICE – PARTNER CONTENT
For many Australians, property remains linked to financial security. Yet high property prices and borrowing costs can make saving a deposit difficult. Younger generations and entrepreneurs may find it unrealistic to commit substantial capital to property, while business owners may prefer to retain capital for growth.
Once acquired, property ownership can provide rental income, capital growth and leverage. These benefits are balanced by ongoing costs, while property is illiquid. Changes to capital gains tax and negative gearing add another consideration for investors.
This does not mean wealth building needs to be postponed. Investing in shares and ETFs allows investors to build a portfolio across markets and asset classes, starting small and building exposure gradually.
Diversified exchange traded funds, or ETFs, provide access to global shares. Property ETFs and listed-property trusts, or REITs, provide exposure to real estate without purchasing physical property. Managed funds and fixed-income investments may support diversification. For entrepreneurs, this flexibility may support wealth building alongside business ownership.
Diversification reduces reliance on one asset, market or business. Regular contributions and reinvested returns can compound over time. The right approach depends on goals, timeframe, risk tolerance and financial position.
Investing can provide market exposure – including to property – while retaining flexibility as circumstances change.
Learn more at cmcmarkets.com.au
General information only; Your needs, personal circumstances or objectives have not been considered. No recommendation is made that any particular investment or investment strategy is suitable. CMC Markets Stockbroking Limited.
Want to see more Forbes articles on your feed? Tap here to make Forbes Australia a preferred source on Google.
Look back on the week that was with hand-picked articles from Australia and around the world. Sign up to the Forbes Australia newsletter here or become a member here.