Banks are a safe deposit for you money. But with record low interest rates, your money is losing value and is not keeping up with inflation. You need to make your money work for you.
The ASX historically goes up 9 out of every 10 years.
Investing in shares makes your money work harder for you and can give you better income and the opportunity for capital growth. Think what your future self needs. What are the costs of letting my money sit in the bank?
What are your investment goals?
It's important to set out your financial goals.
Consider your life stage and your risk profile. These questions will help you decide which shares you buy.
If you are looking for fast capital growth - then you will focus on a portfolio of small cap shares. If you're retired, you may only want regular income through dividends, or a combination of both in a balanced share portfolio.
Find out how to build a share portfolio now.Learn more
Start your share investing with at least $2,000 as recommended by the ASX.
Small Caps are cheaper and you can buy a meaningful parcel with less cash.
Over 90% of our small cap stocks were less than $5 a share when we first recommended them. Over 50% pay dividends too.
You can start with a minimum of $1,000 and purchase one stock with that. Build up a portfolio of shares over time.
One of the first steps to start investing is setting up an online trading account. You can use a full service stock broker for buying and selling individual stocks or ETFs but most beginners and active investors now make the trades themselves from their online account on an app on their phone.
With all investments it's important to diversify. You don't put all your eggs into one basket. For shares it means owning shares in a number of different companies that operate in different industries. This is a proven way to reduce your risk.
It’s ok to start with one stock and to build up your portfolio over time. It all depends on how much cash you have.
We recommend a minimum of 7-15 small cap stocks in any portfolio.
Follow our guide on how to build a portfolio.
What's the right size holding for you?
If the share goes up 5%, 30% or 100% what would your return be? Is a $300 profit on a $1,000 profit if for example there is a big 30% jump enough? Consider what is the right size of holding for you.
The Idle Speculator, Under the Radar Report Portfolio Manager.
A Practical guide: How to place a trade on the ASX
Here are some basics to get you started when you are placing your first trade. Choose your stock and hit buy, then you will then have a few options to select:
Buy: quantity or value
You can either choose a quantity of shares i.e 100 or 1,000 or purchase by amount, i.e $1,000 or $2,500.
It is a personal preference whether you trade shares to the nearest round dollar or by the number of shares, but most fund managers would own a round number of shares rather than a round dollar amount at purchase.
Price: Limit or market
This is what price you are prepared to pay per share. You can just select ‘at market’ and the trade will go through as soon as it can at the market price.
If you choose a limit you put in the price you are prepared to pay for the shares. Your share trading screen will have a depth screen to see the number of buyers, the volume and price and the sellers volume and price. This will give you a sense of where the market is heading.
Check out the price chart
Also look at the price chart to see how the price has moved over the past 12 months, 6 mths, 5 days, and that day. The charts show you the trend over time and intra day as well.
Expiry: good till expiry/ good for day
Are you happy for this trade to only go through today? Or are you happy with your trade at that price until it is executed? If you put in a price and the market moves on from it, your trade may not go through on the day you put it through.
Fluctuation in share prices
What can be a surprise for a new investor is the range that each stock trades both within a day and over a period of time. For example, the Commonwealth Bank (CBA), one of the largest on the market has traded from around $60 to $95 a share in the last 12-months. It obviously also takes more capital to get a holding of 100 shares and the share price can and does move around.
Watch your shares
Watch your stock. Remember to make profits you have to sell. Follow our clear buy, sell and hold recommendations.
Investment advice for beginners
Our best financial advice to beginners is to start small and to purchase small parcels of shares in quality companies over time.
Build up your portfolio over time. We like to buy slowly into a stock and to build confidence. Start buying in small parcels, watch your portfolio's performance (it’s really easy on your trading app) and follow our clear Buy, Sell and Hold recommendations. We tell you what to do and when.
During Covid-19 in 2020-21 when the market was falling fast, we chose 20 quality small companies that had strong balance sheets and business models in industries that would survive a downturn. Our subscribers who followed our advice made record returns.
Remember not every stock will go up, so you should build a portfolio approach. It's also important to sell and to take profits along the way.
There are over 2,000 shares listed on the stock market. Most people are looking to reduce risk and build wealth over time. To reduce risk, beginners need independent research to know the company you are investing in is a quality company that is well run and profitable. You want to make quality investments and we can help you do that.
Our Best Stocks to Buy Now table in our Small Cap report each week makes it really easy to search and choose which stock to invest in. These are the stocks that our analyst team believe offer the best risk/reward return. The performance from these stocks is exceptional with 1,113% return! All the research is done with easy to read and clear recommendations and potential risks, reviewed and ready for you.
We wish you financial success in your investment journey and we hope that you love investing as much as we do.
Key Takeaways - Taking the first steps
We're here for you
Set your investment goals
Are you investing for growth and dividends?
Go to our best stocks to buy now.
Earn income with dividends
50% of our Small Cap stocks pay dividends. 100% of our Blue Chip stocks pay dividends.
Why investors love Small Caps
Small Caps are cheap and offer fast share price growth.
A balanced portfolio
Blue Chips provide stability and returns in a balanced portfolio.
Buy, sell and hold
We tell you when to Buy, hold and Sell. You can't take profits without selling.