If you’re new to investing and are wondering how to invest in ASX securities, it’s important you start your journey on the right foot with professional guidance. At Global Masters Fund, our team is here to help. We have over twenty years of experience with trading shares in a global market and can offer the specialist advice you’re looking for.
What Is the ASX?
The Australian Securities Exchange, also known as the ASX, is the primary stock exchange in Australia. It lists a wide range of securities, including shares, bonds, exchange-traded funds (ETFs), and listed investment companies (LICs). The ASX is a popular destination for people looking to invest in Australian companies and gain exposure to our national economy.
Preparing to Invest in ASX-Listed Securities
When you invest in ASX securities, it can present many great opportunities for you to grow your wealth over the long term. However, before you begin your investment journey, there are a few steps you’ll need to take to ensure you are properly prepared. Before you get started, we recommend taking the following steps:
- Review your financial situation
- Understand your goals
- Research your investment options
Are You Financially Prepared to Invest?
Before you invest in the ASX, it’s important to review your finances with a financial advisor to make sure you have the funds to spare. Of course, the more money you invest, the higher your returns will be if your portfolio performs well. However, you’ll still need to consider your emergency funds and your existing financial obligations before you sink all your savings into your investments.
If you’re investing long-term, the money you put into your portfolio will likely have to be left alone to grow for decades to achieve your financial goals. That’s why we recommend reviewing how much money you will need to set aside to cover any emergencies or loan repayments in the future.
What Are Your Investment Goals?
You know you want to invest in the ASX, but do you know why? It may seem like a basic question to ask, but for many people at the start of their investment journey, it can be a deceptively tricky one to answer.
Establishing clear investment goals to outline exactly what you want to achieve from your investments can take time and have a significant impact on your portfolio’s performance. We recommend talking to a financial advisor to gain a better understanding of your goals and how you can achieve them.
Of course, the reason anyone invests is to make money, but beyond that, you’ll also need to know what you plan to use this money for. Is it part of your retirement plan? Are you hoping to use the money you generate to make a big purchase, such as a house? Perhaps you’re planning on using it to help your children by funding their education or increasing their inheritance.
Whatever your financial goals may look like, it’s important to establish them before you invest in ASX shares so you can build a portfolio that aligns with these goals. Once you have determined why you are investing, it will help you to then outline the following:
- How much money you will need to achieve your financial goals
- When you would like to start using the money you have made
- What your risk tolerance is when investing
Have You Considered Your Investment Options?
When the average Australian thinks of investing, they most likely picture putting their money into different ASX-listed stocks. However, this can be a tricky investment strategy to master if you’re just starting out and are looking for an easy way to diversify your portfolio and minimise risk. Luckily, there are a number of different investment products available on the ASX, such as LICs, ETFs, and managed funds.
These investment products allow fledgling investors to benefit from the knowledge and experience of seasoned investors and their professional fund management services. By entrusting them to make the best investment decisions for your financial goals, it becomes a lot easier to profit from a diversified portfolio while reducing your risk.
Investing in ASX Listed Investment Companies (LICs)
LICs give investors exposure to a wide range of assets by pooling investors’ cash in a managed portfolio that is overseen by a professional investment manager. The exposure that LICs provide makes it easier for investors to diversify their portfolios with investment options they may otherwise find difficult to buy into, such as:
- International shares
- Private equity funds
- Specific sectors
- Emerging companies
At Global Masters Fund, our portfolio includes an array of quality growth companies listed on the ASX, as well as international stock exchanges in New York, London, and Johannesburg. We can be found on the ASX LIC list under the code GFL.