Hot Issues
spacer
State and Federal COVID-19 support
spacer
ATO extends COVID-19 relief for SMSFs
spacer
Three ways to keep market uncertainty in perspective
spacer
SMSFs, employee share schemes & NALI
spacer
Low interest rates require a strategic rethink
spacer
Greenhouse gas emission by country since 1880
spacer
SMSFs can face situational traps affecting related-party transactions with former spouse
spacer
The right way to rebalance your investment portfolio
spacer
Lockdowns and mental health
spacer
The rise of the female investor
spacer
ATO flags availability of COVID-19 early release super recontribution
spacer
World's largest armies 1816 - 2020
spacer
Retirement can be risky business
spacer
A proven way to build wealth
spacer
Two AAT decisions on what constitutes business real property
spacer
ATO zeroes in on SMSF lifestyle assets
spacer
SMSF scams are on the rise: Here’s how to fight back
spacer
Four steps to plan for a better retirement
spacer
‘Mammoth consequences’: ATO’s NALI ruling draws ire from professionals
spacer
Videos and other resources for our clients
spacer
SMSF members highly satisfied with funds
spacer
6-member SMSF registration availability to begin mid-August
spacer
SMSFs go for growth
spacer
Tax time: calculating investment income and deductions
spacer
ATO extends Division 7A relief
Five investing tips for beginners

 

Here are five investing tips for those who are just beginning their investment journey.

 

       

1. Evaluate where you're at financially

Before beginning your investment journey, it's important to sit down and map out your financial position and goals so that you know where you are and exactly what you're working towards.

Start by looking at your savings, income, living expenses and personal debts – this will paint a clear picture of your financial position and what funds you have available to invest.

A common misconception when it comes to investing is that you need a large sum of money to start building your portfolio. Research by Vanguard Australia recently revealed that seven-in-10 Australians believed they needed more than $1,000 to start investing, while three-in-10 believed they needed more than $10,000. Not so, you'll be surprised to know Vanguard Australia has investment options that start from just $500.

2. Create clear goals

It's important to plan your goals clearly when you invest to give yourself the best chance of success.

Without a plan, it's easy to get distracted by daily headlines or rattled by short-term share market bumps. You may end up trying to time the market, chasing unrealistic investment returns and missing out on long-term gains. Make sure your goals are clear, you have a plan and you know where you're heading.

Write down your financial goals in weeks, months and years. Keeping your goals front of mind will help you create an investment plan and stick to it.

3. Diversify your assets

Diversification is an investment strategy that lowers your portfolio risk and helps you get more stable returns.

Diversification lowers your portfolio's risk because different asset classes do well at different times. An important decision for every investment portfolio is how much to allocate to different types of investments. This mix of investments such as shares, bonds, property or cash is referred to as your asset allocation.

What this essentially means is that if one business or sector fails or performs badly, you won't lose all your money. Having a variety of investments with different risks will balance out the overall risk of a portfolio.

4. Do your research

A national survey by Vanguard Australia recently revealed where Australians seek their investing information. Gen Z (47%) and Millennials (36%) sought the opinion of friends and families the most, while Gen X looked to the media (21%), and social influencers (11%) for information.

While talking to a financial planner is the most effective way to manage your personal finances, there are other ways to do your own initial research as a jumping-off point. Beginner investors can consider reputable podcasts, seminars and investment company websites for general information.

Having the right information at hand before you begin investing will allow you to make considered decisions.

5. Keep your eyes on the prize

While it's tempting to impulse buy a new outfit or order takeaway three times a week, make sure to exercise some financial discipline. A useful way to stay on top of your spending is to create a realistic budget. If you know you will buy a coffee every single day, add this to your budget – you need to be transparent and honest with yourself about where your money is going.

Above all, stay focused on your end goal and what you're hoping to achieve. This will be the biggest motivating factor for you to maintain your discipline.

 

 

By Balaji Gopal, Head of Personal Investor
29 Jun, 2021
vanguard.com.au

 

Pattinson Financial Services Pty Ltd ABN 17 121 851 376 is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd
ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523

Tel: +61 2 8850 6888 | Fax: +61 2 8850 6407 | Toll Free 1300 466 637 | PO Box 6253 Baulkham Hills BC NSW 2153

site By PlannerWeb