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ADF Financial Services Consumer Council
cial advice as part of their between the
The important thing is to feel con-
fident that you understand what your
investment options are so you can
make informed decisions, whether that
be through an adviser or by doing your
The key to making informed invest-
ment decisions is to understand the
risks involved. Generally, the higher
the returns the higher the risk. But
no matter what the returns are, you
always need to do your homework.
One between the flags strategy to
minimise your investment risk is to
spread your money across a number of
investments. This is known as diversi-
fication and lets you cope with short
term market movements. You've prob-
ably heard the phrase 'don't put all
your eggs in one basket'.
So if you've managed to set up a
plan, considered advice, done your
homework, assessed the risks and
diversified your investments, you're
investing between the flags.
All you need to do now is moni-
tor your investments and adjust them
if conditions or your circumstances
change. Don't just set and forget, even
if you have a professional adviser.
If you're interested in finding out more
about investing, get a copy of our new
booklet, Investing Between The Flags by
phoning ASIC's Infoline on 1300 300 630.
Or you can download a copy from www.
Email ASIC with topics that interest you
Investing -- are you ready to begin?
THE ability to plan strate-
gically is a skill that most
Navy personnel have. It's a
skill that helps you make
informed decisions based on evi-
dence and your experience.
If you're interested in investing, the
first thing you should ask yourself is
'am I ready to invest?'
Before you invest
People think about investing for all
sorts of reasons. You may have come
into some money from a deployment
allowance, inheritance or gift, or you
may have a specific goal in mind, for
example to build a deposit for a home
or to take an overseas holiday.
Whatever your reasons, before you
invest there are three things you need
to check-off first.
Debts under control?
Careful budgeting is the first step to
reducing debt. If you owe money, are
your monthly repayments comfortably
less than your monthly average house-
hold income? Do you have a problem
paying your credit cards, mortgage or
other personal loans?
Got emergency money?
Do you have cash savings you can
draw on in an emergency? A good rule
of thumb is to have ready access to
cash equal to three months of house-
As Navy members you may have
some insurance cover automatically.
The key is to make sure you know
what you're covered for and what's
excluded. For example, your home,
contents and car are likely to need per-
sonal insurance cover.
Are you an investor?
An investor is someone who puts
money into an investment product or
an asset in the hope of increasing their
capital or getting an income -- or better
still, doing both. That means just about
everyone invests, even if it's money in
your bank account or your super fund.
There are certain investment behav-
iours that should keep people out of
trouble most of the time. However,
investing is never risk free.
We say that some investment
behaviour is 'between the flags', and
some is 'outside the flags'. We've
used this analogy because when you
go to the beach, you will reduce the
risk of drowning if you swim between
the flags. Similarly, when you invest,
you will reduce the risk of losing your
money if you invest 'between the
We all have different experiences
and goals. So your flags are likely to
be placed differently to your parents,
children, neighbours, friends and other
The key to knowing what's between
or outside the flags for you is getting
to know your own circumstances and
Investing between the flags
You will be investing between the
flags if you've identified your current
position and have plotted your future
Having an investment plan that
meets your goals and suits your invest-
ing style will help you to make the
most of your investments.
Be sure to have a plan that takes
account of your personal situation. For
example, if you are likely to deploy
overseas for six months you may need
Many people seek personal finan-
Chairman of the Australian Securities and Investments
Commission Tony D'Aloisio says that, when it comes
to investing, there are a number of things you need
to consider before you commit your money. Try to
transfer your ability to make strategic decisions to your
BUY OR SELL: On the floor of the New York Stock Exchange -- the
ASX doesn't allow photographs.
November 26, 2009
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