The Australian stock market was formed in 1991 with the merger of the Sydney Futures Exchange (SFE), Queensland Futures Exchange (QFEX) and the Melbourne Stock Exchange (MSX). It has grown to be one of Australia’s largest financial exchanges, where companies can trade their shares freely by investors. Stocks are traded on either ASX 24 or ASX 24-Holidays. There is also a futures exchange referred to as The Australian Securities Exchange Limited, which trades financial products such as fixed interest securities, gold, and foreign exchange contracts for future delivery.
The main thing that all investors should remember when investing in Australian stocks is that there are no guarantees on their performance, so they have to be prepared for significant fluctuations in price and possible capital loss. The other thing is not to invest money you can’t afford to lose, as market conditions change frequently and drastically, meaning prices may rise dramatically but also fall quickly. Ownership of shares is recorded by certificates issued by brokerages that are members of the exchange. Have a look at Saxo once you feel comfortable to start your trading journey.
Tips to Help You Get Started
1. Understand What You Are Investing in
Before investing, you should have as much information about a company as possible to be more prepared and less likely to lose money. Some investors do a lot of research on a company, but others may trust the recommendation from their broker or financial advisor. This is a bad idea as a broker’s primary interest is in getting you to invest, so they may not be telling you everything you need to know about an investment. Any information learned must be verified by other sources, such as online forums and mailing list groups such as Yahoo Finance if possible.
2. Have a Strategy Or Plan On How To Invest Your Money
Like with anything else in life – it helps to have some sort of plan or strategy when doing something – whether it is making dinner, driving somewhere or even playing chess. Having a strategy gives people confidence and reduces stress, which helps them be more relaxed, and hopefully, they will do a better job. The same goes for investing; you need to have some sort of plan or strategy for what you are doing to achieve your financial objectives.
3. Start With A Little And Learn As You Go Along
Learning how to invest in the stock market is not easy – it takes time, effort and patience. Also, if it has never been done before, then the learning curve may be steep as there is usually no previous experience to draw on. It helps if people start small with small investments, this way, they won’t lose too much if things go wrong. Then they can build their confidence up by testing different strategies on smaller amounts of money until they are sure about what to do.
4. Keep An Eye On Things And Be Patient
It is not often that people can predict the future with any degree of certainty, but one thing they can be sure of is that things change over time. So if you are following a plan for your investments, then expect some variation. Markets sometimes fluctuate wildly up and down – this is just part of investing in stocks, so don’t panic if it happens, sit back and wait till the market settles down again before making an investment decision. Patience will pay off most times as you don’t want to make rash decisions because something happened quickly or unexpectedly. This contributes to the importance of having a strategy with a plan.
5. Have A Good Understanding Of Tax Implications
Figuring out the tax implications of an investment is vital for any potential investor to understand before they start, as it will determine how much money you keep at the end of the day. You should definitely consider this when investing in Australian shares, as each state has its own set of tax laws, and so depending on where you live, this may affect how many dividends or capital gains tax you have to pay. You don’t want to be surprised by enormous bills come tax time so make sure you factor this into your budgeting when investing.
If you’re a novice trader it is advisable to practice all new instruments and strategies on a demo trading account before making a real money investment.