Are you thinking about starting your own share portfolio in 2019? If the answer is yes, then take your time, there is plenty to consider. To help out we have outlined five simple steps you can take to start your own share portfolio.
1. 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 worth considering, as you do not need too much to get started. Remember to take into account the brokerage cost as part of your overall investment.
2. 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 is not without risk, as share prices are subject to market conditions and can rise and fall at any time. So it is important you are comfortable with what your investing in and the risks associated.
3. Decide how active you want to be.
Are you going to be an investor or trader? If you are investor generally you will take a long term view, meaning that you will not be concerned about daily price movements. If you are going to be a trader and profit from the daily share price movements, then get educated, it is not for the faint hearted and is best left to the professionals.
4. Manage your expectations.
We have all heard stories of people who have made fast money in the share market, it can happen, but it is better to take a long-term view and invest in good quality companies with strong underlying businesses. Do not buy a hot tip from a friend or work colleague, as it can end badly.
5. Research and pick your stocks.
Generally speaking, investing in 8-10 good blue-chip companies is an ideal portfolio size, as it spreads your risk and offers exposure to a number of quality businesses. Importantly, do not just look at the price, you can buy a vast number of 20 cent mining shares, but the risk associated with a company is reflected in its price, which is the reason why good quality stocks are priced higher. Lastly, make sure you understand what you are investing in and do not just take someone’s word that it is a good thing!
Ready to invest?
If you are keen to get started, then speak with one of our investment advisors and get your money working for you. Our advisors will provide you advice on your investment options and help you build your wealth. To make an appointment call Cameron Moore on (03) 5331 3711.
DISCLAIMER: The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.