Media headlines focus more on share market drops than rises, but wherever there is a weakness there is usually an opportunity lying in wait. High quality companies are available at excellent value if you know where to look, but if you’re not sure how to take advantage of these opportunities, we’ve outlined three ways to invest into the share market.
These are probably the easiest way to enter the share market with a smaller investment. Open a managed fund account with as little as $1,000 and rely on the expertise of the fund manager to buy and sell the shares to meet the fund’s investment goals and level of risk.
There is usually an entry fee and the manager will charge ongoing fees which are deducted from your investment’s income. As the manager purchases and sells underlying investments when he or she considers it appropriate, you have less ability to manage your own tax situation, especially when capital gains on the underlying investments are concerned.
Direct Share Purchase
The main benefit of buying shares directly is that you own the shares and all of the income is paid directly to you. You also manage your tax position by buying and selling shares when you (with your adviser’s guidance) consider appropriate.
There are two ways to directly purchase shares:
Separately Managed Accounts
Separately Managed Accounts (or SMAs) offer the best of both worlds - direct share ownership with the expertise of an investment manager. An SMA is a customised share portfolio managed by the SMA provider in accordance with one or more specific investment models. These are similar to a managed fund with the difference being that because you own the underlying shares you control when and how much you invest. You also manage your own tax situation.
You can start with an investment of $5,000. Brokerage is kept to a minimum and as you are making regular investments into your account, you benefit from dollar cost averaging (investing small amounts regularly into the market, thereby reducing the average cost price of your shares).
Share investment can be confusing and time-consuming. If you’re not sure which option is best for you, we can help you determine an appropriate strategy for your circumstances.
This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, Coral Coast Financial Services and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you wantmore information.
Coral Coast Financial Planning Pty Ltd ABN 18 108 580 794 Coral Coast Financial Planning Pty Ltd ABN 18 108 580 794 is an Authorised Representative and Credit Representative of Hillross Financial Services Limited ABN 77 003 323 055, AFSL 232705.