So, you have decided you would like to build yourself an investment portfolio that includes some shares but what does that mean and where do you start? Investing in shares will make you part-owner of a business. Shares can be a sound long-term investment but are very risky to use in the hope of making a quick buck.
When talking about shares you may find that shares may also be referred to as stocks, securities or equities and here’s some advice on how to get started in the sharemarket and what you need to buy shares and build up a solid, diversified share portfolio. It’s important that you avoid picking stocks at random and make sure that you do your research and buy shares that will grow your wealth for you.
Step 1 – Find some spare money.
You don’t need much to get started. You can invest any amount in the sharemarket, but because of the buying costs, the more money you have to invest, the cheaper the brokerage fees.
Step 2 – Find a great Broker and get some advice.
Brokers work for firms that simply take your order and enter it in the market, or firms that take you on as a client and provide advice, research and financial planning to help with your investments. While the former may be cheaper, the dearer fees of the latter while being more costly will pay out with quality advice in the long term.
Step 3 – Decide whether you’re a trader or a long-term investor.
As an investor, you’re in a safer position for share investment and more likely to succeed. Traders (meaning professionals and committed semi-professionals who buy and sell shares daily) are legitimate investors in the sharemarket, but this kind of activity is only for those who know what they’re doing.
Step 4 – Choosing the right stocks.
For a long-term investor, 8 to 12 well-chosen stocks will give you a portfolio with far less speculative risk than just 2 or 3 shares. What you buy depends on the return you’re hoping to make, the risks you’re prepared to run, the time frame you’re prepared to invest for, and whether you’ll need to take the money out before then.
Step 5 – Research the companies whose shares you buy.
Find out what the companies do and how they’ll make money for you. Buying shares you know nothing about based on tips from friends or acquaintances (even worse, strangers) is the same as going to a casino. A blue chip at $20 mightn’t look as exciting as a goldmining share at 10 cents, and the latter can double much more quickly — but it can also reach zero value faster.
Step 6 – Don’t look for shortcuts to investing success.
Unfortunately, you won’t find a guru or blackbox software tool that can predict which shares will rise and which will fall. If someone tries to sell you a foolproof investment formula, ask yourself — if it really worked, why would they share it with me?
If you want to start your own share portfolio or review your existing share portfolio we can help. Contact us today and we can help you make informed decisions over a ‘barista-style’ coffee or gourmet tea!
Business Development Specialist - Ceebeks Business Solutions for GOOD
I love business and the ability to change people’s lives through them!
At Ceebeks Business Solutions for GOOD, we get up every morning to positively impact young families in business by making their businesses REALLY work so that we all make an even bigger impact together. The rewards that bring allow our team ('the fantastic five') to make small but powerful contributions to impact our local community, our country and the lives of those less fortunate around the world.
You see, something quite remarkable happens when we work together, for example, the gift of water is made when we prepare a tax return, the gift of a goat is provided when we help a new business start-up, the gift of shelter is forwarded when we organise a home loan. When we work together, we actually change the world!
I am a business development specialist with nearly 40 years’ experience, a CPA, an authorised representative of Avana Financial Solutions Ltd (Authorised Representative no. 231937) and a credit representative of Outsource Financial Pty Ltd (Authorised Representative no 396061). I have recently co-authored an International Best-Selling Book 'Legacy - The Sustainable Development Goals in Action' and in 2020 published my first book - 'Chasing the Dream! - How to Grow a Business in these Amazing Times', host a daily blog/vlog on our small business Facebook community group page 'Chasing the Dream, and with our Team run a monthly event for small business owners called 'The Chasers Meet-Up', where a guest speaker presents a topic and tips and strategies are openly shared.
In 2015, our business won the Change GPS International Member Firm of the Year and in that same year, I was a founding member of the Global Accounting Movement - Accountants for Good. We were recognised in 2016 by Steve Pipe in his international publication - The World's Most Inspiring Accountants and Featured in "The LinkedIn PlayBook" by world-renowned social media strategist and consultant, Adam Houlahan. In 2017, we were in the Top 25 Most Popular Accounting and Tax Services Award for search4accountants, B1G1 Business for Good Top 100 Giving Businesses in the World and a Semi-Finalist in the 2017 Victorian Regional Achievement and Community Awards. In 2018, we were an Australian Accounting Awards Finalist in "Community Engagement Program of the Year", a Semi-Finalist in the Victorian Regional Achievement and Community Awards 'South West TAFE & Deakin University South West Regional Achiever Award', a Nominee in the Victorian Regional Achievement and Community Awards 'Regional Development Victoria Business Achiever Award', and featured in the Top 25 Most Popular Accounting and Tax Services Award by search4accountants.