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How to invest in stocks and shares in Australia (in 2024)

6 ways to invest in the stock market if you're a beginner - including ETFs and share trading.

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Stock investing is a time-tested and popular way to grow your money. In fact, 34% of Australians have bought shares and 17% have invested in ETFs, according to a recent Finder study1. Even more of us are exposed to the stock market through superannuation.

But how do you actually get started on your investment journey?

This guide will take you through the basics, including how to make money from stock market investments and the different approaches you can take when investing in Australia.

Stock investing in a nutshell

When you buy shares (stocks, securities, or equities), you essentially become a part-owner of a company. This ownership entitles you to potential dividends and other benefits like voting rights.

You can choose to buy shares individually using a broker or share-trading app or join with others by investing in a managed fund.

6 ways to invest in stocks

Here are 6 of the most popular methods for investing in shares in Australia:

  1. Buy stocks with a broker: You can invest in stocks directly through a stock broker or trading platform.
  2. Invest in ETFs: By purchasing units in an exchange-traded fund, you can invest in a whole stock portfolio.
  3. Micro-investing apps: You can invest from a few cents at a time through micro-investing apps.
  4. Through superannuation: Most super funds invest in a portfolio of stocks along with other financial assets.
  5. With an SMSF: Build up your own investment portfolio through a self-managed super fund.
  6. Use a wealth manager or financial advisor: You can employ an advisor to buy stocks, and manage your investments, on your behalf.

How do you make money from stocks?

There are 2 main ways to make money from the stock market:

  1. Capital gains: If the price of a stock rises above what you purchased it for, you can take home the difference by selling.
  2. Dividends: Some profitable businesses give back money to shareholders in the form of a dividend payment. This way you can make money without needing to sell any stocks.

One of the major benefits of owning shares is you can earn a passive income. Despite daily or even yearly fluctuations, history suggests that stock markets typically rise over the long term, meaning your wealth can grow with it if you've invested.

Finder survey: On average, how much do Australians invest each month through an investment app?

Response
10011.43%
25010%
50010%
1508.57%
2008.57%
508.57%
3007.14%
104.29%
404.29%
604.29%
10002.86%
62.86%
01.43%
1201.43%
201.43%
2901.43%
301.43%
30001.43%
561.43%
6001.43%
641.43%
701.43%
751.43%
8001.43%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023

1. Invest in stocks through a broker

The main way to invest in the stock market is to buy shares through a stockbroker. You have 2 options here: you can buy shares online using a share trading platform or use a full-service stockbroker.

A full-service broker is a traditional brokerage firm or investment bank such as Goldman Sachs or Morgan Stanley.

The main benefit is your broker does all the trading for you based on your instructions and may offer advice. The downside is you'll be charged a premium fee for its service, starting from $70–$200 per trade.

The cheapest and simplest way to buy stocks is to use an online broker and place the trades yourself. These charge anywhere from $0–$30 per trade in brokerage fees.

You can check out our top picks for online brokers below or compare the full market through our comparison table.

What stocks should you invest in?

The goal of buying any stock is to get more money from it than you spent on purchasing it. For this reason, you'll want to invest in companies that you think will go up in price over time or at least pay out a dividend.

To master the art of this, you’ll need to do your own research into each of the companies.

It’s a good idea to know the company’s fundamentals, why you should own it, what you think the growth potential is like and when you might sell it.

Bear in mind that it's safer to have a diversified portfolio of stocks from different sectors and even countries to avoid major losses if a market falls. A diversified portfolio typically consists of at least 20-30 stocks.

Look for sustainable competitive advantages from a great reputation, geographic location, benefits from scale, technology, patents, innovation or IP, the network effect or barriers to entry. Always remember the most valuable competitive advantage is the ability to raise prices without a detrimental impact on unit sales value..

Tips for finding the best stocks

  • Do you trust the company? The best company to invest in is one that you both understand and trust. Pick a company that you believe will continue growing and can be trusted to use its profits wisely.
  • Do you use its products? Are you a fan of Apple or do you use Facebook every day? These could be good options because you'll also be among the first to notice if the company starts under-delivering to customers.
  • Debt and profit levels. Are debt levels under control and is profit growth meeting expectations?
  • Expansion. Does the company have plans to expand into new global markets or sectors? A growing company usually means a rising share price.
  • Dividends. Does the company pay a dividend? If not, are you expecting the company's share price to rise?
  • Stock price. Is the stock overvalued? An expensive stock is where the share price has risen beyond its perceived value, which could mean it's going to fall in the near future. Read more in our guide "How to value a stock".
  • Expert view. Follow the price targets and stock ratings of top investment banks and brokers such as Morgan Stanley, Goldman Sachs, Morgans and UBS. Usually they'll give "buy", "hold" or "sell" ratings. Just keep in mind that even the experts get it wrong a lot of the time.
  • Platform tools and research. You’ll often have access to market research, analysis and even stock recommendations through your trading platform, so use this info to help make an informed decision.

How to buy shares without a broker

There are a few ways you can buy shares without a stock broker or share trading platform at all:

  • Managed funds. You access shares without a broker by investing in a managed fund directly through the fund manager. These funds typically hold multiple company stocks that are selected by a fund manager.
  • IPOs. Some crowd-funding platforms allow you to buy shares when a company first lists on a stock exchange, called an initial public offering (IPO).
  • Your company. Some firms offer their staff company shares as part of their employment contract. These are called employee share schemes.
  • Off-market transfer. It’s possible to inherit shares or be given shares by someone else without a broker. This is called an off-market share transfer.
  • Share purchase plan (SPP). Sometimes companies raise extra capital by selling new shares via an off-market share purchase plan. Typically, you invest in an SPP directly through the company itself.

Watch: How to invest for beginners

2. Invest in stocks through ETFs

If you want to invest in shares but do not want to research individual companies, then buying an exchange-traded fund (ETF) could be an option.

ETFs are a whole portfolio of stocks. They vary in how many they hold and what their strategies are so make sure you read the product disclosure statement (PDS).

Generally speaking, they fall into 3 categories:

  • Market tracking ETFs. You know the ASX 200 or the S&P 500? Well, a market-tracking ETF owns a small portion of all the companies on the index. The ETF provider will simply buy it on your behalf and re-weight it, usually quarterly. These are the lowest-fee ETFs.
  • Actively managed ETFs. These are professionally managed ETFs with someone actively choosing what to buy and sell. As such, the fees are usually higher on these ETFs.
  • Thematic ETFs. These are for investors who want to gain exposure to a certain theme. Let’s say for example you think the transition to net zero or cyber security will be profitable, then you can get an ETF that is mostly exposed to this theme. However, these ETFs are slightly more risky than traditional ones as you are only exposed to a few sectors of the market.

The mechanics behind an ETF are similar to shares in that you transact with them on the stock market.

Like stocks, the easiest way to invest in them is through an online stock broker where you can purchase them in the same way that you do stocks.

ETFs are arguably the most cost-effective and efficient way to invest in the stock market. Index funds like ETFs also regularly outperform even professional fund managers over the long-term.

3. Invest in stocks with micro-investing apps

Want to turn your spare change or rebates on your shopping into shares? Well, you can through micro-investing apps.

These apps are popular among newer and younger investors.

Micro-investing apps will typically invest in a bunch of predetermined ETFs or stock portfolios that should match your risk tolerance.

You can typically set a recurring investment into your portfolio of choice on a weekly or monthly basis. Some apps such as Raiz Invest will even round up your spare change from purchases and automatically invest it.

While it will take a long time to fund larger saving goals such as buying a house through micro investing, it can help you get started in the market and is great way to passively invest.

4. Invest in stocks through superannuation

Your superannuation is another way for you to start investing in the share market.

In fact, it's likely you are already invested in the share market.

For those using their superannuation to invest in shares, they are usually in a balanced or a higher growth option.

The lower-risk superannuation plans generally hold a larger portion of bonds and cash, while the higher growth plans own shares.

As a general rule of thumb, you should take on more risk when you’re younger and reduce it as you get older. Of course, personal risk tolerance plays a major role in what is the right option for you.

5. Invest in stocks through an SMSF

If you are a high-net wealth individual, you can directly take control of your superannuation through a self-managed super fund (SMSF).

Instead of relying on your super fund provider to manage your portfolio, you can decide which stocks and other financial assets (such as property or even gold) you want to hold.

While it can be beneficial to directly manage your own retirement fund, keep in mind that if you can’t outperform the market, then you’ll retire with less.

It's also generally agreed upon that due to the high costs of running an SMSF, it might not be worth it to open an SMSF if you have less than $250,000.

6. Use a financial advisor

If you have larger amounts to invest and are unsure about how to manage your investments and assets, you could consider appointing a financial advisor to manage it on your behalf.

Financial advisors and wealth managers specialise in managing large investment portfolios on behalf of their clients, based on their risk profile and investing goals.

In Australia, anyone offering personal financial advice needs to have an Australian Financial Services Licence (AFSL), so if you decide to hire an advisor, make sure they have the relevant certification.

Naturally, wealth managers and advisors charge a fee for their services, and this is something that needs to be weighed up when considering whether to use them.

What to understand before you start investing

Investing in the stock market can be a great investment, but it can also be pretty risky, especially if you don’t have a financial plan.

To build a plan, you’ll need to ask yourself the following key questions:

  1. How much can I afford to invest in stocks?
  2. How much can I afford to lose?
  3. How long can my money stay in the stock market?
  4. What will I do if prices start to fall?
  5. What about if prices rise?

Once you can answer these questions, you can start mapping out how you want to invest in the stock market and the types of stocks or ETFs you want to invest in.

As a rule of thumb, the riskier the investment, the bigger your potential profit. Work out if you can afford to buy high-risk stocks (such as penny stocks) or if you should stick to safer long-term investments like blue chip stocks or index funds.

Harrison Khannah

I use Raiz for micro-investing in stocks by completeing Surveys for research companies. This means I am able to invest around $5-10 a week from doing these surveys.
— Harrison Khannah, Software Engineer

Do you need to pay taxes on stock investments?

Yes, you need to pay tax on any profits you make from shares, including dividends. Any income you make from dividends is automatically recorded by the Australian Taxation Office (ATO) and is included as part of your regular taxable income at tax time.

Profits that you make on capital gains – i.e. when you buy low and sell high – are only counted in the financial year that you’ve sold your shares. Your broker will usually send you a tax invoice with any profits that you’ve earned from stocks each financial year.

Tip: If you hold shares for more than a year, you only need to pay tax on half of the profits you’ve earned. You can read more about share trading and taxes in our tax guide.

How do stock markets work?

You can think of the stock market (aka stock exchange) in the same way you think of an online marketplace like eBay or Facebook Marketplace.

Each day, thousands of people go online to buy and sell products with the aim of making as much money as they can - in the case of a stock market, it's company shares.

Every major country has at least one stock exchange.

The bigger the economy, the more likely they will have multiple exchanges. For instance, in the US there is the New York Stock Exchange (NYSE) and the Nasdaq exchanges as well as several other smaller exchanges.

In Australia we have the Australian Securities Exchange (ASX), Cboe Australia, the National Stock Exchange of Australia (NSX) and the Sydney Stock Exchange (SSX), although the ASX is by far the most popular.

Companies will choose which exchange to list their stocks on depending on where they think they will get the most investor support balanced with the costs.

Most Australian companies will list their stocks on the ASX, although some have chosen to list on US exchanges, such as Atlassian which is listed on the Nasdaq.

To buy stocks in any one company, you'll need to check which exchange it's listed on (noting it might be on more than one) and then find a broker with access to that exchange.

What are the risks of stock investing?

Before you start buying and selling stocks, be aware of the risks:

  • You can lose money. A company’s stock can plummet to zero in the worst-case scenario. If you've invested in such a company, you could lose your entire investment.
  • Bankruptcy. Shareholders are usually the last to be paid when a company goes broke. When this happens, there’s a good chance that you won’t get your money back.
  • Emotional toll. Daily share market fluctuations can cause plenty of stress for investors. If you can’t handle the ups and downs, you may be better off looking for a safer and steadier investment option.
  • Unexpected problems. Even if you do a lot of research into a company, it’s simply not possible to predict the future. Natural disasters, terrorist attacks, bad company news and even changes in government policy can all occur unexpectedly and adversely affect the price of shares.
  • Lack of expertise. While investing in the share market sounds quite easy in theory, it can get complicated if you don’t know what you’re doing. First-time investors should be wary of getting ahead of themselves.
  • Getting in over your head. A final word of warning if you’re thinking of investing in shares: don’t bite off more than you can chew. Make sure to use your common sense and take a cautious approach – good advice no matter whether you’re planning on investing in shares, property or anything else.

How popular is share trading?

34% people have invested in shares or cryptocurrencies, according to our consumer sentiment tracker. 43% of men said they have invested while only 25% of women have invested in shares or cryptocurrencies. NSW and Victoria are the most popular states for share trading.

Compare online stock brokers to invest in shares and ETFs

Take a look at Australian online trading platforms in the table below. These platforms will let you invest in various stock markets.

Depending on what you're after, it may save money to use more than one platform – for example, a platform for Australian shares and a platform for another market such as US or UK stocks.

Name Product Price per trade Inactivity fee Asset class International
eToro
Finder AwardExclusive
eToro
$0
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account (T&Cs apply).
CFD service. Capital at risk.
Join the world's biggest social trading network when you trade stocks, commodities and currencies from the one account.
CMC Invest
Finder Award
CMC Invest
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
Moomoo Share Trading
US$0.99
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get $100 to trade when you deposit $1,000, or $200 when you deposit $5,000 or more. Earn 6.8% p.a. on uninvested cash. T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
Tiger Brokers
US$2
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: 10 no-brokerage US or ASX market trades in the first 180 days + 7% p.a. on uninvested cash with first deposit of any amount, plus US$30 TSLA + US$30 NVDA shares with deposits up to AU$2000. T&Cs apply.
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
Webull
US$0.25
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Get advanced research and trading tools with $0 brokerage and free lvl 2 NASDAQ stock data for 30 days. T&Cs apply.
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
Saxo Invested
US$1
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Access 22,000+ stocks on 50+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
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Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

There are plenty of factors you'll need to take into account when choosing a broker, so check out our guide to choosing the best online share trading platform for more details.


Share market update

  • 9 April: The price of iron ore dropped to a 10-month low of US$96.70 a tonne at the beginning of the month, finally feeling the hit of China's weakening property market. Despite this, the ASX 200/S&P Index set 2 record highs in March, the first on March 8 hitting 7847.0, followed by a new record of 7896.9.
  • 7 Mar 2024: The ASX 200 rose +0.2% to 7,749 points following strong results in tech stocks (+0.8%) and utilities (+1%). Despite 2 of Australia's mining giants dipping (BHP down -1.2% and Rio Tinto down -2.4%), news of the US Federal Reserve chair Jerome Powel planning to cut rates in 2024 also helped the Australian market.
  • 2 Feb 2024: The ASX 200 dropped by 1.06% to 7600 points influenced by declines in the tech sector and broader market reactions to global financial events. This movement reflects a shift in investor sentiment and market dynamics during the period.
  • 8 Jan 2024: The ASX 200 began the year with some fluctuations, dropping 1.4% to 7,523.2 points on the first trading day and then hovering around 7,494 the next day. However, it quickly rallied, with the index approaching its all-time high, closing at 7627.8 points, just a few points shy of its peak
  • 2 Nov 2023: The Australian stock market fell into a correction from October 30 after the S&P/ASX 200 index dropped 10% below its February peak thanks to sticky inflation and conflict in the Middle East.
  • 9 Oct 2023: The Israel-Hamas war is having an impact on markets with gold and oil prices expected to spike and the Australian Dollar falling further, dragging import stocks along with it.
  • 5 Sept 2023: Australian and US markets were flat through August as both markets wrap up reporting season.

Frequently asked questions about investing in stock in Australia

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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8 Responses

    Default Gravatar
    SukhvinderJanuary 28, 2018

    Hi, I’m an international student here. I want to invest in stock market. What should I do and how can I do it?

      AvatarFinder
      JonathanFebruary 23, 2018Finder

      Hi Sukhvinder, thanks for your inquiry.

      To start trading shares in Australia, the easiest way is to open a trading account with your bank. Online brokerage/ trading is more cost effective than a full service stockbroker, who provides advice on which shares to purchase. If you require more advice and guidance, it could be advantageous to find a full service stockbroker.

      From there you will be able to specify the share/s you want to buy and the amount of shares.

      Thanks,

      Jonathan

    Default Gravatar
    ClaireSeptember 21, 2017

    Is there any site available, where I can invest for the long term? As I am the independent and working woman, So I want to save money for future. As currently, my children are young. I am interested in investing in mutual funds sites. While exploring on the Internet I came across a https://foragerfunds.com site. Does anyone here have any experience investing from this site? Should I go for this or you guys have any further options? Please recommend.

      AvatarFinder
      RenchSeptember 22, 2017Finder

      Hi Claire,

      Thanks for reaching out to us. Please note that we are not affiliated with any company we feature on our site and so we can only offer you general advice.

      Unfortunately, we don’t have a review page of Forager Funds. We cannot say if this is recommended or give out personal opinion.

      You can also have a look on these pages for helpful information on how stay safe and protect your personal and financial details when trading shares online and also compare your options from there:
      https://www.finder.com.au/share-trading
      https://www.finder.com.au/best-online-share-trading-platforms

      Hope this helps.

      Cheers,
      Rench

    Default Gravatar
    gibDecember 1, 2015

    I want to buy $300.00 worth of Stone Resources Australia Ltd shares and pay with my m Visa Debit card plus brokerage.

      AvatarFinder
      ShirleyDecember 1, 2015Finder

      Hi Gib,

      Thanks for your question.

      Unfortunately, as per ASX regulation, the minimum amount of shares that you can buy is $500.

      Once you’ve signed up to an online trading platform, such as the ones displayed on this page, you can then link the account to your transaction account.

      After that’s all set up you can start to buy the shares (ASX Code: SHK).

      Hope this helps,
      Shirley

      Default Gravatar
      TroyMay 4, 2017

      I know I’m a little late but Shirley’s answer is wrong $300 of shares would be an ‘unmarketable parcel’ and in violation of ASX rules.

      The minimum amount allowed is $500 but even then you would want to consider the costs of brokerage of buying an selling.

      AvatarFinder
      DeeMay 8, 2017Finder

      Hi Troy,

      Thanks for your comment and for bringing this to our attention.

      Yes, you are correct, as per ASX, the minimum marketable parcel of shares is $500. We have already updated the previous answer.

      Cheers,
      Anndy

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