How to Start a Share market portfolio from Scratch…
Even if you have never invested a dollar
Written by R. A. Stewart
You are a beginner to investing and want to know how to get involved in the share market and don’t have much money to invest.
My advice is firstly to ensure you have set up a pension scheme with your employer. This will help make money retirement easier as far as finances goes. Anything else you invest should be treated as strings to your financial bow.
Here is my advice to investing novices.
There are two ways for you to drip-feed your money into the share market. They are:
- To join a managed fund type of investment. This is a fund where your money is combined with the money of other investors. The fund manager invests in the share market on your behalf. This minimizes risk because funds invested in this way are spread across different asset classes, something which is unobtainable for most investors unless you are already financially well off.
- To sign up with an online investing site where you are able to drip-feed money into the share market. Do your research into the various platforms. Popular ones are robinhood in the USA and sharesies in Australasia.
Two pieces of advice which financial experts will tell you is “Do your research and diversify.”
It helps if you are familiar with the industries and companies you are investing with. I use the online platform “Sharesies” which is based in New Zealand. My strategy is to choose one company per year and drip-feed money throughout the year into this one company. I chose New Zealand based companies, all of them household names. I have already decided the following year’s company to invest in by Christmas.
I have invested in a range of companies such as Genesis Energy, Spark, Fontierra, Fletcher Building, PGG Wrightsons, and Contact Energy. All are well known brands.
It is important not to get too greedy. The internet is full of stories of people who got rich investing in this or that and made a killing. This has to be treated like a grain of salt because for everyone like that, there are countless others who tried the same thing and failed.
Greed often gets the better of people and the one who made the killing will often end up giving it all back.
The share market rewards consistency and persistence. Make sure you are in the right fund for your risk profile and your goals. If you are drip-feeding money into the share market like I am doing then it shouldn’t matter how the markets are performing. Just keep investing and let time be your friend. After all, investing with an online app is just another string to my financial bow.
You should invest in the share market with money that you cannot afford to lose is a piece of advice I have heard time and again. The main question before you invest in something is, “How will the loss of this money affect my lifestyle?”
I would not recommend that you invest in growth funds if you need the money within a year or two because the markets may drop just as you are about to withdraw the money.
It is important to be sensible and strategic with your investing and just as important to keep a cool head otherwise you may end up with burnt fingers.
About this article
The opinions expressed in this article are of the opinion of the writer and may not be applicable to your personal circumstances, therefore, discretion is advised. You may use this article as content for your blog/website, or ebook.
Read my other articles on www.robertastewart.com
