Starting an investment portfolio can be daunting task given the number of investment options and complexity in various investments. To help you get moving along your wealth creation path, here are three simple ways to start an investment portfolio;
1. Invest into a Managed Fund – With enhancements in technology, you can easily get access to managed funds with as little as $500. A Managed Fund is where you invest your money into a Fund (with other poeple) and it is managed by a Fund Manager (the Professional). There are thousands of different Managed Funds out there, each with their own specific characteristics. If you are looking to get maximum exposure, you can look at investing in the Vanguard Australian Index Fund. This will give you access to the largest 300 companies in Australia.
2. Invest into a Direct Shares – Just like buying a managed fund, you could make an investment directly into the share market through a share or equity. This can be purchased through an online share trading accounting such as Commsec or E*Trade. If you only have a small amount, you could consider buying AFIC (AFI) which is similar to the Vanguard Fund and it gives you a good diversified position in the market.
3. The first two options provide you with a strong core portfolio – they are well diversified, low cost and easy to get access to. f you have more funds to invest (more than $20,000) you should look at the idea of building a specific portfolio. It can, or should include one of the options in 1 and 2 but it can also include more specific stocks or managed funds. These investments don’t all have to be locally – you could invest into Berkshire Hathaway (started by the world’s greatest investor Warren Buffet) and get access to a global stock portfolio.
Regardless of what you want to do, it is important you follow some basic guidelines;
1. Know what you can invest and what you can risk
2. Know what your investing in and the fees
3. Ask for advice if you are not sure
4. Just get started…