Which shares are best for first time investors?
Maybe you’ve just received your annual tax refund, or you’re planning to have a frugal Christmas and stash away some of the cash you’d usually spend on your nearest and dearest, but you suddenly find you have some spare money.
If you shy away from investing because you think it’s for those in the know, or for people with money they can afford to lose, then you might like to compare savings accounts guaranteed by the Australian government (up to $250,000). Right now you can get up to 2.65 per cent pa on a savings account.
Term Deposits are also generally considered a safer investment than shares. Right now you can easily beat inflation with a safer, rock solid term deposit from a neo bank or many other institutions.
If you want to have a go and are strong enough to understand and withstand the risks, read on about Australian shares for first-time investors.
It’s never too early to start investing
Nowadays, with exchange–traded funds, or ETFs, you can start investing with little–to–no financial knowledge. You don’t even need a huge amount of money to invest in an ETF. Many Australian ETFs have minimum opening deposits of $500, putting them within reasonable reach of many people, especially those disappointed by their savings account returns.
An ETF is a collection, or basket of securities that’s traded as a single entity on the stock exchange. They’re good for new investors because they can essentially put their money into the fund and let the fund managers take care of the rest. ETFs can provide fairly healthy returns and they’re also easy to sell if they’re not performing as well as expected.
How to invest in shares easily
Investing in shares in Australia requires research and advice. First time investors need to learn the basics of holding shares, buying and selling shares and the different companies on offer on the ASX.
Possibly the easiest way to invest in shares, that we have found through personal experience and research at InfoChoice, is with a micro-investing app like RAIZ, Spaceship Voyager, FirstStep or CommSec Pocket. Read a complete review of CommSec Pocket here.
Which shares are best for first–time investors?
If you already have funds in an ETF and want to branch out your portfolio a bit, then you can buy shares in an LIC, or a listed investment company. Unlike managed funds or ETFs, LICs have a finite number of shares that investors can buy, rather than the open–ended growth potential of managed funds. These shares are still handled by experts rather than the investors.
LICs include companies like the Australian Foundation Investment Company (AFIC) and Argo Investments. Investing in these companies does involve buying shares, but it’s a good introduction as they’re well–established and offer good returns. Your money can grow in relative safety with them while you learn more about the more mysterious nuts and bolts of investing.
Compare investor margin loans from Australia’s banks and other lenders at InfoChoice.
This article is not financial advice and is not written by a financial advisor.
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The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements
InfoChoice compares financial products from 145 banks, credit unions and other financial institutions in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.