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Everyone wants pretty much the same thing from an investment - more money out than they put in. But when it comes to how that is achieved, we all have our own preferences. It's called your investment personality and it's something you should clarify before you start investing. Our investor risk profiler can help you find out which investment is right for you.

Wise investors spread their investment across several different types, and balance the proportion they have invested in each type to suit their needs. Here are the main types of investment.

Cash: In essence, this involves putting your money in the bank. Cash investment is a popular with New Zealanders. It's a simple way to invest, easy to cash in and is usually stable and low-risk. There is a downside however; cash by itself does not make a good long-term investment. In fact, of all the investment types, cash generally has the poorest return over the longer term. Over time, inflation can erode the spending power of the cash you have invested.

Fixed interest: Remember how the rich people in movies owned shares and bonds? Well, bonds are one form of fixed interest investment. With fixed interest investments, you invest for a set period of time for a set amount of return. It's like an IOU from the company issuing the fixed interest investment. They agree to pay you back what you put in, plus a little more for your trouble, by a certain date. A fixed interest investment usually gives you more return for your money than cash.

Property: Most kiwis are pretty comfortable with this type of investment. Rental properties and paying off a mortgage are pretty easy things to get your head around. However, property investment can also include commercial real estate, property development companies and new building projects. With investment in property you can typically enjoy income from rent as well as capital growth over time. It's generally accepted that the returns from property investment are higher than cash or fixed interest, but with the higher returns comes increased risk.

Shares: Share trading is effectively buying ownership of a company, or at least part of it. As a shareholder in the company you may be paid a dividend on your shares and can watch the price move upwards (or downwards). While shares often enjoy higher returns than other investment assets, the sharemarket can be volatile. So you'll have to be willing and brave enough to watch your investments go through highs and lows.

If you'd like to know more about investing you can make an obligation-free appointment with one of our investment advisers or branch investment specialists. Phone 0800 ASB FUNDS (0800 272 386) or email invest@asb.co.nz.

Important disclaimer:
The views expressed herein are those of the authors and are based on information believed but not warranted to be correct. Any views or information, whilst given in good faith, are not necessarily the views of ASB Bank Limited and are given with an express disclaimer of responsibility and no right of action shall arise against any of the authors, ASB Bank Limited or its employees either directly or indirectly out of any views, advice or information.