Are you looking to start a share portfolio?
Including direct shares as part of your investment portfolio is a sound way to build long-term wealth. But there is plenty to consider when it comes to investing in the share market. Here is a brief list of things to consider:
Work out how much you can invest.
If you have built-up some cash in a bank account or received some unexpected funds then the share market is definitely worth considering, as you don’t need too much to get started. Just remember to take into account the brokerage cost as a percentage of your overall investment.
Understand your risk profile.
Historically the share market has offered better returns than term deposits, and is certainly much better than leaving your money under the pillow. However, it’s not without risk, as share prices are subject to market conditions and can rise and fall at any time. So it’s important you’re comfortable with what you’re investing in and the risks associated.
Decide how active you want to be.
Are you going to be an investor or a trader? If you’re an investor generally you will take a long-term view, meaning that you won’t sweat over the daily movements. If you’re a going to be a trader and profit from the daily share price movements, then get educated, it’s not for the faint-hearted and is best left to the professionals.
Manage your expectations.
We’ve all heard stories of people who have made fast money in the share market, sure it can happen, but it’s better to take a long-term view with shares and invest in good quality companies with proven success. Don’t go on a hot tip from a friend or work colleague, because it’s usually too good to be true.
Research and pick your stocks.
Generally speaking, investing in 8-10 good blue-chip companies is better than investing in 2-3 companies. That way you get a slice of several good quality companies and it spreads your risk in the process. Importantly, don’t just look at the price, sure you can buy a heap of those 20 cent mining shares, but there is a reason why good quality stocks are priced higher. Lastly, make sure you understand what you’re investing in and don’t just take someone’s word that it’s a good thing!
Talk to Cameron about your plans ...
To buy or sell domestic and international shares contact Cameron Moore on (03) 5331 3711 or complete the enquiry form on this page.
PPT Financial Pty Ltd (ABN 64 050 243 073) Australian Financial Services Licence No 252992
Director Representatives: Tim R Hovey, Peter J O’Connell, Cameron R Moore, Brent P Olszewski.