If you are looking to start a DYI share portfolio, you can set one up yourself and without a financial adviser or broker.
Using an online broker will set you back at least $30 just to set up a share trading account, and of course the cost for advice on what shares you should be buying will also be costly. A full-service broker usually charge about $100 per trade, online brokers around $30 for a transaction.
If you are going to go it solo in the Australian share market, here are a couple of tips:
- Buying all your shares from one company may not be the best strategy. Consider this putting all your eggs in one basket, with the long term risk.
- Focus on companies listed on the Australian Stock Exchange (ASX).
- Diversify across different sectors and industries.
- Consider how long you are intending to remain in the share market, and what level of risk you are comfortable with.
- Go for quality not quantity. Many traders suggest sticking to the top 20, or at the very least the top 50 market performers.
- Never buy a stock just because someone says it is a winner. Do your own homework looking forward at the company’s future prospects.
- A share portfolio is all about buying quality assets for long term gains.
- Remember if you intend to use a broker for trades, and only have a small portfolio, most of your profit will be eaten up in broker fees. For this reason, most brokers suggest a minimum investment of $5,000.