How To Buy And Sell Shares

There’s very little gain in parking your funds in a bank savings account. To see your money grow you’ll need to put it somewhere with better interest which is why so many Australians are turning to investments. Buying and selling shares is easy, especially with online platforms helping out.

How investing in shares works

Investing in shares works by putting your money behind a business or company and getting rewarded if that company does well over time. Rewards may be increased share demand, making your owned shares more valuable, or regular dividends as the company grows and turns a profit.

Getting started in investing

You don’t have to be a business executive, retiree or millionaire to get started in investing. Anyone can invest as long as they have a healthy budget and are willing to understand more about how the share market works.

Make sure you’re financially ready

If you have high-interest debts, like credit cards, you won’t get to see big results from your investments. Pay your debts down and pad out an emergency fund before you allocate money to investments.

Understand your investment goals

What do you want your money to do and when do you want to access it? Knowing the answer to these questions will determine your risk tolerance and best investment options.

Choose an investment strategy

An investment strategy is an action plan that helps guide your investment decisions, monitor your funds and know what to do in changing circumstances.

Different strategies suit different investors and market conditions to help you choose between high-growth prospects and strong dividend track records.

Determine how much money you need

How much money you need depends on your personal budget and goals. No matter what your aim, chances are it will take several years (at least) to procure results.

Using a broker to buy and sell shares

There are two ways you can use a broker to invest, an online do-it-yourself service or a full-service broker.

Online broking services

An online broker gives you access to a broker platform to buy and sell shares on their registered stock exchange. For a low fee, you get access to an account with up-to-date stats, research and trading.

Full service brokers

For full support from an experienced broker you can pay extra to have them provide advice, suggestions and trade for you. You also get more opportunities through tailored investment plans and initial public offerings (IPOs).

Buying shares directly

You can take more control and gain investing experience with an online investment platform. You can’t buy shares directly as you will need to be registered to a stock exchange but a brokerage platform is the next closest thing.

Indirect share investments

Hedge funds, unit trusts and mutual funds are different ways to invest where a number of investors pool resources over a basket of assets. It’s indirect because you don't own part of the company.

Types of buy and sell orders

There are many different types of buy and sell orders, the two main ones being market orders- where you buy and sell instantly based on what is in front of you, and limit orders where you place a limit on how much you are willing to spend per share in the near future.

Selling your shares

The best way to manage investment risks is to be willing and ready to sell your shares. If your investments are losing ground you need to be able to quickly calculate your losses and cut ties before the slide gets out of hand.

It's clear that parking your funds in a bank savings account yields very little gain. To truly see your money grow, it's important to explore your options. That's why an increasing number of Australians are turning to investments, such as buying and selling shares. With the help of online platforms, investing has become more accessible and user-friendly than ever before.