Here in this blog post, we will see how to invest money in the Australian stock market. What are the ways to invest money in the stock market? So here we are discussing the different ways to invest money in the stock market.
01) Micro-investing Apps
Mirco investing allows you to invest small bits of money typically with a full-service broker they do have a minimum amount that you can invest for example $100 to $500 and the fees can be very high if you put money in and take money out.
Mirco investing apps don’t need $1000 thousand dollars of investment. You can start with only $5.
If you are from Australia then you can use these particular apps to invest your money.
III) Comsec Pocket
and If you are from the US ( United States) then you can use the below apps:
III) and public.com
*What are the PROS of Micro Investing
- Invest a small budget
- Low effort
- Auto investment
*What are the CONS of Micro Investing
- Limited Customization
Now we will see another way to invest money in the stock market
02) Robo Advisor
It will ask you questions about your personal finances and situation. Questions like 01) How long do you want to invest your money 02) What is your risk profile 03) They can be asked about your assets ( ETF, Gold, Bond, and Cash )
So these are some different Robo Advisors that you can have a look into in Australia.
Stockspot, Sixparks, and Investsmart are a robo advisor in Australia.
and If you are from the US ( United States) you can use the Wealthfront, betterment, and Interactive advisors.
What is the benefit of Robo advisor
- Low efforts
- Managed for you
What is the disadvantage of Robo advisor
- Fess ( More expensive )
- Limited customization
03) ETF ( Exchange-Traded Fund )
ETF stands for Exchange-Traded Fund, Instead of purchasing one stock you are purchasing lots of stocks. ETFs are generally less risky than purchasing individual stocks. Most ETFs are passive which means they don’t try to outperform the market.
You can buy ETFs through the CMC markets and pearler. And if you are from the US you can use Robinhood. The benefits of Investing in ETFs you are not putting all of your eggs in one basket because you are buying baskets for different stocks your risk is more diversified.
What are the PROS and CONS of ETFs
PROS of ETFs:
- Low Cost
- Easy to trade
CONS of ETFs:
- Market or sector risk
- Currency Risk
- Tracking Errors
- Liquidity Risk
- More research
- Management Fees
Now we will see what are the ETFs BlackRock, Vanguard and Betashares
04) Individual Stocks
Individual Stocks are riskier than ETFs because they are less diversified. There are so many individual stocks in the markets.
Blue Chips Stocks: These are companies like apple they are well-established stable companies and they suit investors who want steady returns and not as much risk.
Speculative Stocks: These are most suited toward experienced investors who are willing to risk their capital for potential greater return.
Dividend Stocks: These are typically blue chip stocks and this can provide investors with passive income.
Growth Stocks: These are typically smaller companies that prefer to reinvest their profits back into growing business than paying out dividends to their investors. Growth stocks do have the potential to have great returns over time, Also they have the potential to have greater losses.
05) Managed Fund
When you invest in a managed fund, your money is essentially pulled together with investors and then the fund manager buys and sells assets on your behalf.
So these are the 05 Ways To invest your money in the Australian stocks market.