OPTION 1 INVESTING Year 10 Commerce

INVESTOR CONFIDENCE Financial markets are affected by investors’ confidence. Terrorism has made some investors more cautious and thus wary of investing in shares. In times of international uncertainty, money moves out of shares and into more secure forms of investment.

HOME OWNERSHIP In the main, Australians are keen to buy their own homes and consequently have considerable debt. Interest rates are currently relatively low, which helps investors to enter the property market. Problems arise when interest rates go up and investors find they can no longer meet the payments on their mortgage. They either have to renegotiate their mortgage or, in some cases, sell the property.

SUPERANNUATION The federal government currently requires employers to contribute 9 per cent of employees’ income to a superannuation fund. These funds are required to be invested until the employee turns 60 years old. Many investment experts believe the percentage should be higher because most people will need to invest more than 9 per cent of their income to a superannuation fund to be able to have the lifestyle they would like when they retire.

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