Starting Out as a Share Investor

Friday, October 5th, 2018

Investing in shares is becoming a popular option with young people keen to get ahead. It’s much easier than investing in property. The entry cost is much lower (you can literally start with just a few dollars), you don’t have to borrow money to invest, there are no rules and regulations to restrict you, and you don’t have all the hassles of maintenance and dealing with tenants.

There are several different paths you can take to start a share portfolio. Your chosen route will depend on how much time and effort you are willing to put in to researching investment opportunities, your level of knowledge, and how much money you have to invest. For direct investment, you can work with a broker or set up your own online broking account (for example through ANZ or ASB). For share funds, you can use the Sharesies phone app, buy exchange traded funds or invest in managed funds.

The disadvantages of investing directly into shares rather than funds are primarily the need to do your own research and the lack of diversification and high brokerage costs when you have a small amount to invest. The advantages are the possibility that your chosen investments may outperform the market as a whole, no management fees and the satisfaction of doing it yourself.

As with any form of investing you need to decide what your goal is as well as your investment time frame. You can hold shares for the long term or trade them on a frequent basis, but we aware of the tax implications of trading. Shares are volatile in value and you should consider how much you are prepared to lose and how long you are willing to wait for a recovery.

Start with a small amount and give it a go!

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