The Australian financial services sector is one of the most productive in the country, and it contributes $140bn per year to the country’s GDP. A large part of this industry is the retail investment world: plenty of Australians have various types of financial asset in their portfolios. However, if you’re not at that stage yet and are just about to take your first steps into the investment world, then you may well be feeling nervous – and with good reason. This article will explore how you can make the leap and immerse yourself in the world of investing.
Choosing the right investment type
Stocks and shares are perhaps the most obvious investment vehicles, and the firms on the Australian Securities Exchange form a good starting point. However, you don’t have to limit yourself to tangible investments. CFDs, or contracts for difference, are derivative products – which means that they track the market but don’t confer ownership. This makes them easier to access, and it’s often possible to get started with a CFD broker right away. CFD brokers are often internet-focused in nature, so if you’d like to trade online, then it certainly makes sense to choose this asset class.
Taking specialist advice
The beauty of the modern trading world is that it’s possible to find out the answer to most questions online in a short space of time. However, the internet can’t answer everything, and speaking to a financial advisor can help you identify investment vehicles thatsuit your personal circumstances. This is especially important if you’re planning to go down the stocks route rather than the CFD route, as there are lots of laws in place regarding stock trading – such as insider trading rules. It’s also vital to speak to professionals such as surveyors if you plan to go for investment types such as property.
Keeping emotions out of trading
As a newbie trader, one of the most pressing problems that you’re likely to face is actually a psychological one. For all new traders, there’s an inevitable moment of panic at one stage or another when your first loss or market downturn becomes a reality – and it’s likely that you’ll want to cancel your trades right away, or make an even more rash decision, such as opening up new trades in an attempt to make back any lost profits. This sort of knee-jerk decision isn’t wise, though. Instead, it’s best to devise a strategy well in advance, and use your broker’s stop loss tool to ensure that you won’t lose more than a certain amount. That way, you can be rational and calm without losing more than you can afford.
Clearly, then, you’ll have a lot to think about when it comes to setting up your first investment. From selecting the right asset class from the many available opportunities to setting up an appointment with an advisor, there’s a lot to do. By taking your first steps, though, you’ll be able to get well on the way towards a thriving investment portfolio.