Investing can be intimidating to a lot of people. There are so many different options to choose from and it can be hard to figure which is right fit for you. We have compiled a list of investments types, which will guide you through what they are, how they work and who they are best suited to.


A share is an investment in a specific company. When you purchase shares, you are purchasing a small piece of the company, called a share. When you purchase shares you became a shareholder, which means you own a share in the company’s future profits and dividends.

Investors purchase stocks in companies for two reasons: capital growth and dividends. Capital growth means the investor believes the profits and the share price will go up in value over time. Generally speaking, when profits rise, a company’s share price increases in value as well, at which time, the stock can be sold for a profit or continue to be held. Dividends are cash flows that the company pays out to shareholders and are generally a reflection of profits. Companies generally pay dividends when capital growth prospects are lower, and the company is unable to earn an satisfactory return on this cash.

Share prices can fluctuate throughout the day. Indeed, there are times when the share price may not reflect the underlying business over the short term. However, we believe that the value of a company (and its share price) will in the long run reflect its level of profitability.

The risk with investing in shares is that companies can lose their value or they can go out of business. That is why understanding the business is important, especially regarding debt levels and profitability. It is also why it is important to diversify your stock holdings to spread risk across a portfolio of companies. It is generally recommended to buy shares across different companies rather than focusing on just the one.

Shares are best suited to:

  • An investor who wants to build up a nest egg for medium and long-term saving goals

  • Investors with a longer investment time-frame of 5 – 7 years

  • Investors that are comfortable with a higher level of risk in exchange for higher returns over the long-term

Oracle has been investing in shares for clients for over 3 decades. Our expert advisors can assist you in buying and selling shares and can provide recommendations on what stocks might suit your portfolio.


In a broad sense a bond is a loan, that an investor makes to a company or a government. Once you purchase a bond, you are allowing the bond issuer to borrow your money and pay you back with interest. Bonds are generally considered safer than stocks because the return is not dependent on profits (though can fluctuate based on interest rates or perception of creditworthiness).

Bonds also have a higher claim on the business than shares in the event of liquidation. For this increased level of security, bonds offer a much a lower return on your investment. Bonds are a fixed investment and investors expect to receive regular income payments. The interest you receive from your bonds is paid typically paid out twice a year.

There are two types of main bonds you can purchase, Australian Government Bonds (AGBs) and Corporate Bonds. Government bonds are the safer option between the two types of bonds since a government that issues its own currency can always afford to pay the interest by printing money. There is still some risk with bonds. Like stocks, the company you purchase bonds from (i.e. lend to) could fold, or a government could default. For this reason, the company or government credit worthiness should be understood before investing.

Bonds are best suited to:

  • An Investor who wants to receive regular income via interest payments

  • An investor who is happy to forgo some potential returns in exchange for lower risk on their investment

Managed Funds

If the idea of picking and choosing shares or bonds to invest is intimidating to you, then a managed fund might be for you. A managed fund allows the investor to purchase many investments in a single transaction. A managed fund works by pooling lot of individual investors money from different sectors into one fund that is invested and controlled by a professional investment manager.

If you are new to Investing, this can be a great option, as you can rely on the expertise and knowledge of an investment manager to manage your money and further your individual investment goals.

A Financial adviser can help you to set your financial goals and understand your individual risks and find the right investment tailed to you. Contact our advisers who can help you reach your goals.

Managed Funds are best suited to:

  • An Investor who is new to investing

  • Investors that are happy to outsource the selection of investment to professional managers

  • Investors that only have a small initial amount to invest

  • Seeking to invest in diversification to minimize the risk of losing money

Separately Managed Accounts

Separately Managed Accounts (SMA) are similar in theory to Managed funds, however, the key difference is they are administered by an investment manager where the investor owns the underlying investment. The investment manager decides on the appropriate weightings for each investment and any changes are affected across each investor’s portfolio.

This contrasts with a managed fund, where the investments in the fund are pooled and investors own units in the fund and not the underlying investments. The SMA provider takes care of all the reporting, making it easy for your accountant to calculate capital gains, income and franking credits when preparing your tax return and accounts.

Oracle Investment Management offer a wide selection of Separately Managed Accounts, that can cater to almost all types of investors.

    Separately Managed Accounts are best suited to:

    • Investors who value paying low cost fees

    • Investors that want the best of both worlds; a managed portfolio together with the advantages of direct share ownership

    Index Funds

    An index funds is type of managed fund that passively tracks a given index, rather than paying a manager to pick and choose your investments. The benefit of an index fund is that they tend to cost less because they do not have that active manager. The risk of the index fund will depend entirely on the investments within the fund. An index fund provides a broad market exposure with low operating expense and low portfolio turnover.

    For example, investors can invest in an index fund that will track the S&P/ASX200 fund, allowing investors to receive that same return as an investment in a fund made up of the top 200 companies listed in the ASX.

    Index Funds are best suited to:

    • Investors looking for a low-cost investment option

    • Passive buy and hold investors


    Superannuation is a common investment, where it is specifically designed for retirement savings. Depending on your super fund, you can choose to invest to wide network of assets, including shares, property, bonds, fixed interest, and managed funds.

    Superannuation is required by the government to be paid on behalf of all employees and generally cannot be touched until one reaches retirement age. This is to ensure that as many Australians as possible can self-fund their own retirement. You can either nominate a super fund or your employer will select one for you.

    At Oracle Advisory Group we specialise in analysing your current superannuation provider and advising the best outcomes for you based on your specific needs, with the aim of making this investment area achieve superior returns with lower risk and to be tax effective into the future. 


    A property investment is one of the most well known investments. Investing in property offers the investor the potential ability to increase capital value over time, while also earning a rental income from tenants.

    Property Investments are best suited to:

    • Investors that do not require emergency access to their money

    • For those who wish to invest long-term (5 – 7 years +)

    • Keen investors in property in either the residential or commercial markets

    Alternative Assets

    Alternative assets are a new investment type that is gaining awareness and importance in Australia and abroad. There are a variety of investments that fall into this category including:

    • Hedge Funds: variety of complicated strategies that aim to reduce volatility of investment returns

    • Private Debt: high risk company loans

    • Private Equity: purchasing shares in companies that are not listed on share markets

    • Infrastructure: investing in large-scale public systems, services, and facilities

    Alternative investments are often included in an investment portfolio of those that have the appetite for unconventional and at times more risky investments. As they are extremely specialist in their nature, alternative investments need to be treated with caution and under the guidance of a qualified investment professional.

    How to choose your Investment Strategy

    The type of investment you select will largely depend on the level of returns you seek and the level of risk you are comfortable taking and can afford to take. Once you understand this you should also:

    • Know how the investment works

    • How it generates a return and the type of return expected

    • Understand the risks of the investment

    • Research the fees and charges for buying, holding, and selling the investment

    • Estimate how long you should invest to receive the expected return

    • Understand the legal and tax implications of your investments

    Your Next Step

    Before you jump headfirst into investing, it is vital to consider each type of investment and then determine your asset allocation that aligns with your investment goal.

    There are many types of investing options to choose from. Some can be appropriate for beginners, while others require more experience. Each investment comes with its own level of risk and rewards. The first step is work out what you want to achieve by investing your money and then how much you are willing to invest and whether you wish to invest for short or long-term returns.

    In reality these investment types are not mutually exclusive. Many investment plans incorporate a range of investment types that spread the risk of investment through diversification that work together to achieve investment goal objectives.

    For those that require guidance in investing, the final step is to contact an experienced financial advisor who will tailor an investment plan to cater to your individual need and investment goals.

    Contact us or book a free consultation today. We can help you plan your way to financial freedom.

    Important information

    While every care has been taken in the preparation of this document it does not contain any recommendations to buy or sell any particular stock(s) noted. Oracle Advisory Group makes no representation or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. The information in this document is general information only and is not based on the objectives, financial situation or needs of any particular investor. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek their own professional advice. Past performance is not a reliable indicator of future performance. The information provided in the document is current as the time of publication.

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