Warren Buffet started investing in shares when he was just 11 years old. Today he one of the richest people on the planet, with an estimated worth of US$84billion.
Buying shares is becoming a part-owner of a business. Throughout history it has been business owners, whether founders or subsequent investors, who have been most successful at accumulating wealth and generating financial security for themselves, their families, and in some cases, future generations too.
And this is hardly surprising. When a business succeeds, it makes profits. It typically pays a portion of those profits out to its owners – its shareholders – in the form of dividends. It then recycles the retained profits to grow the business. It might be a new marketing campaign, building a new factory, or starting a whole new division. Of course not all of these initiatives work, but for successful businesses, most do. Sales and profits grow, and so the shareholders, the owners of the business, get richer.
So how can you participate? Like most worthwhile pursuits, taking the first step is the hardest. So in today’s post we’ll point you to the best Australian resources we’ve found for investing in shares as a beginner.
1. Share investing for Dummies Cheat Sheet (Australian edition)
This is a great place to start your Australian share investing journey. It a concise web post that covers:
· Starting a Share Portfolio
· Maintaining Your Share Investment Portfolio
· Things to remember about owning shares
Get this one under your belt as a foundation piece on your share investing journey.
View the post here.
2. Investing in shares: a guide for beginners – Money magazine
This article by Greg Hoffman is a great next step to deepen your knowledge without getting overwhelmed in detail.
Greg explores investment philosophy, and developing an investment approach that sits comfortably with you. He lays out a 5 point plan for beginner investors looking to get started in the Australian share market and is a useful and practical piece.
3. Money Smart
The MoneySmart website is administered by ASIC (Australian Securities and Investment Commission). It’s a bit drier than our first two items, but its attraction is that it provides completely impartial and unbiased information.
The starting point should be their Shares page, which takes you through the benefits, risks, and practicalities of buying shares in Australia.
They also have an entry on Choosing Shares to Buy, which explores topics such as researching companies and diversifying your portfolio.
4. ASX – Australian Securities Exchange
It’s hardly surprising that the home of shares in Australia – the ASX – should have some good quality information on how beginner investors can get started.
They have a free online course which consists of 11 videos, each running around 15 minutes. The final 2 get a bit technical, but videos 1 -9 all provide helpful content to get you to the point where you can make a start with investing in shares.
The ASX also have a Sharemarket game which runs at regular intervals and allows you to have a go at investing in shares, without putting any of your hard earned money at risk.
5. The ETF issuers
A popular way to go for many share investors, both beginner and experienced, is to use Exchange Traded Funds – ETF’s. You buy and sell ETF’s on the stock exchange, just like a regular share. The difference is that the ETF is a portfolio of a whole bunch of companies, so you achieve instant diversification, and therefore, lower risk.
There are several ETF players in the Australian market, but the biggest two are Vanguard and Blackrock. Both have quality education information for beginner investors.
Vanguard provides excellent information on the process of indexing, which is what determines which underlying shares the ETF holds, and in which proportion. They also explain what ETF’s are, and their benefits to investors.
Blackrock issue the iShare ranges of ETF’s and like Vanguard they have great free information on the benefits of using ETFs, and how to go about choosing the right ETF for your goals.
By now you’ve got your head around what shares are, how markets work, what the risks are, and hopefully how investing in shares might help you achieve financial security and choice.
The next step is to visit a share brokers web site and open an account. There is no cost for doing this, and often they will provide access to research. Once logged in you can get research on most companies listed in the Australian Stock exchange, see the prices they are trading at, and broad data on what’s happening in the market. You can create a watch list of companies that you’re interested in, to get a feel for their volatility, before actually putting your money into them.
7. For graphs – Yahoo Finance Australia
Hindsight is a wonderful thing, and looking backwards is of limited usefulness. But it can sometimes be helpful get a sense of the price trajectory of a share or ETF that you’re interested in. The Yahoo Finance Australian site has great graphing capabilities. It’s especially useful I find, when used to compare one share or ETF against another.
A quick tip that might save you lots of frustration – to make sure you get the Australian company that you are looking for, put “.AX” at the end of your search. For instance if you type Australian vaccine maker CSL into Yahoo Finance, even though it’s the Australian page, it will take you to an American company called Carlisle Companies Inc. But type in CSL.AX, and you’re in business.
So there you have my 7 Essential Australian Resources for Investing in Shares as a Beginner, I hope you’ve found it valuable.
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Note: The author does not receive any benefits, commissions, etc, for the links provided to external companies in this post.
This information is general in nature only, and has not considered your personal circumstances. Investment entails risk of losing money. You should obtain advice specific to your personal circumstances, needs, and objectives.
Resources & Links
- Gaining Choice – Newsletter
- The Financial Autonomy Program
- Share Investing for Dummies
- Investing in Shares: A Guide for Beginners
- How to Invest in Shares
- Choosing Shares to Buy
- Shares Course
- Sharemarket Game
- Vanguard Investor Resources
- BlackRock Education Centre
- Yahoo Finance