The 5 common investments are each different in their own unique ways. You could almost say that they have different personalities. So naturally, we asked ourselves – what would investments be like if they were people?
The dramatic one: Shares
Everyone is either obsessed with them or terrified and won’t go near them. If shares were people, Commsec and ASX would be their Instagram and Twitter. The Australian Financial Review would be their MTV. Everything about them is broadcasted to the world down to the minute, and there always seems to be a ‘situation’ that needs to be addressed.
They tend to be celebrities and seem to have drama every other minute. Their polarising temperaments mean that everyone has an opinion about them. Take Tesla, for example. Fans are saying Tesla could fall to $US10 from nearly $US200 if tensions with China escalate. You forgive them for their volatility though because despite all the controversy that surrounds them, you know they are just trying their best to be better.
The work in progress: Property
Property is the friend you’re always worried about, no matter what. When their prices are rising, everyone is worried. ‘There’s a property bubble! Raise interest rates! Tighten lending standards!’ When their prices are falling, everyone is worried. ‘Cut interest rates! Reduce the serviceability buffer!’ Perhaps it’s their susceptibility to everything going on around them – interest rates, inflation, population growth, government policies, you name it. Maybe it’s easy to doubt them when it takes so long to realise their value, even though they have definitely grown over the last 30 years, arguably more than shares. These guys are just a work in progress.
The predictable one: Government Bonds
This is the loyal, low maintenance and predictable friend who has been by your side for a long time. You sometimes wonder if this friendship has run its course, and you wonder if you should swap them out for someone more exciting. From time to time, a hedge fund or derivative might catch your eye and you wonder if they might be a better source of support compared to your government bond. But time and time again, the value of your government bond shines through. Just ask QSuper. It is their high-duration Australian government bonds that have allowed them to sustain annualised returns of 8.6% over the past decade, and come out on top as the top-performing super fund in 2018.
The mysterious one: Venture Capital
This is the mysterious friend. You worry about them a lot. Have they been getting enough sleep? Have they paid their bills? You’ll get the occasional Facebook post from them and it’s always huge news – ‘just secured another $1 million in funding.’
Apart from that, they’ll fall off the radar, sometimes for months at a time. You’ve tried, but you still struggle to fully understand them or maintain a sustainable friendship with them. You’ll grow apart and reconnect, eventually. You either run into them on the streets and find out their life has gone completely under. Or, you find out they’ve become wildly successful and now they can’t stop giving you personal and professional development advice.
The multitasker: Exchange Traded Fund
The ETF is the friend with their fingers in many pies. They’re the agreeable ‘yes friend’ who works two jobs, plays a sport, volunteers and does not turn down a single social event. They’re one of a kind because not everyone can juggle so many things at once and do it so enthusiastically and effortlessly. Everyone wants to be their friend, and they’re happy to be there for everyone. Sometimes you wonder if they are truly happy and if they give themselves as much as they give everyone else.
What do you think? Are there any other ‘personalities’ in the investment world that we’ve missed? Comment below!