Women aren’t the most active share market investors, but that’s a fact which is changing and that’s probably because our wealth is growing and frankly, once you get your head around it, investing actually isn’t that difficult.
For example, if you’re dead keen on buying a house, which the majority of Australians seem to be, then you start by focusing on saving for a deposit.
But if you’re happy renting you could invest in the stock market instead, and you can start with just $500; Anything smaller will get eaten up by brokerage fees, which at around $20-30 per trade, is 4-6 per cent of your investment.
Don’t even think about investing in the share market if you’ve got a stack of debts.
It’s no bloody good hoping to make a 9 per cent return on the stock market if you’re paying off a credit cards or loans that might be costing you upwards of 20 per cent in interest!
Nowadays there are many ways to invest in the share market, be that through your super fund, directly, small change investment platforms or managed funds.
If there’s a company you like, or an industry you know, do some online research around their share price and buy at a price you are comfortable paying.
You can buy shares yourself by setting up a brokerage account through your bank or an online broker.
As you save more money, you can buy other stocks. You should be thinking about building a portfolio of different stocks to spread risk.
If the prospect of managing your own stock portfolio is a little daunting, there’s the other option of investing in a fund. These might be managed funds, which is pretty much what your super fund is, or exchanged traded funds (ETFs).
Investing in a fund gives you instant diversification over a number of industries and companies.
Managed funds are run by professionals, and you pay these professionals a fee for their expertise.
You can find out what funds are performing well over time and the fees they charge by checking out a site like Morningstar.
Look for well performing funds over the long term, with low fees (less than 1 per cent).
Managed funds generally need a bigger initial investment of around $5,000 however, though some will let you start with as little as $1,000.
Exchange traded funds track an index, like the S&P ASX 200, which means you are investing in the top 200 companies in Australia.
Exchange traded funds have very low fees and you can buy them with any amount of money.
If the share market is right for you, what’s your next move?
- Decide how much money you are willing to invest
- Choose whether you’d like to buy into a fund/ETF or individual shares
- Open a brokerage account, there are plenty to choose from and dead easy to set up
- Research the company or fund you’re interested in investing in