How to Invest

We all know we need to invest for the future, but getting started is one of the hardest things to do. Where should you put your money…in property, shares or cash? And do you even have enough money to get started?

There are countless books and websites all telling us what to do. No doubt, some will have some good advice. But what the authors of those books don’t know is what makes you tick.

You need to understand your own personality, and invest accordingly. Maybe you’re conservative and don’t like to take on risk. If that’s the case, trading a highly leveraged product like futures probably isn’t the way to go.

Once you start looking around, you’ll quickly find there’s more than one way to grow your wealth. However, a common theme among those that invest successfully is they both understand, and are comfortable, with what they’re investing in.

How to invest in property?

If property is your thing, then that could be a place to start. And it doesn’t mean you have to rush out and buy an investment property. You can invest in Real Estate Investment Trusts (REITs) on the ASX with as little as $500.

There are wide ranges of REITs, which invest in everything from office blocks, supermarkets and shopping malls, through to childcare and medical centres. What’s more, they can pay you some nice dividends along the way.

How to invest in shares?

And if you want to invest in shares, but don’t know where to start, there are over 100 listed funds (and investment companies) that make the investing decisions for you. Some are as basic as copying the index, while others use more complex strategies, or invest overseas.

Again, you can invest with as little as $500 and see how you go. If you feel comfortable, you can always add to your holdings. Some managed funds allow you to make regular contributions so you can build up your investment over time.

If you’re uncomfortable in an investment, it can often mean that you have too much money invested, or don’t fully understand how it works. The trick is to find something you like and understand, and only invest an amount you’re comfortable with.

Ideas on the best places to invest your money

Our ideas and insight could introduce you to some of the most profitable investment opportunities in Australia.

Investors Need to Take On Less Risk

The conservative investor points to mounting uncertainty, saying investors should start taking on less risk. A fuzzy future is their kryptonite. They don’t know what will happen next and they don’t want to stick around to find out.

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Every Trader’s Worst Enemy (and How to Beat It)

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The Impact of Emotion on Stock Prices

Fundamentals impact investor psychology, and investor psychology has a big impact on asset prices. I’ve been writing a book on this and have recently reviewed the draft, so the concept of investor emotions having an impact on price is top of mind for me.

Should You Invest in Exchange Traded Funds?

I guess you can’t really blame investors jumping out of active and into passive investments. One passive vehicle growing in popularity is exchange traded funds (ETFs). Should we all just buy ‘the market’ and be done with it?

The Best Way to Pick Stocks

Today, asset managers are again changing how they look at stock. Not only are they looking at charts and earnings expectations. Fundies are using mathematics to find non-correlated bets, risk adjusted returns or factor-based models.
Money Morning Australia