Looking for the perfect investment

It isn’t hard to find the perfect investment. Just open any newspaper and check out the fixed interest offers in the market these days. Offers of first-ranking debentures paying 8%, 9% or 10% per annum, or better, are commonplace.

And this is at a time when the banks term deposits are paying around 6.5% for one year. Meanwhile most managed funds aren’t able to say what they are paying, as returns will be subject to market conditions.

Is it really that easy? A guaranteed higher return is certainly attractive, and there are some very respected names making the offers. A fixed return that beats the banks, with no fees and no risk. Perfect!

Is it really that good? In AXA’s view, we suggest that an investor needs to look deeper than this. Potential investors need to remember some fundamental principles of investing – diversity, and security. Some debentures are good quality – relatively safe, and a good investment. But nothing is really risk-free, and investments don’t always deliver. Like any significant purchase, ‘kick the tyres’ a little before buying, and you might be very surprised at what you find.