When you buy a share, you own a small part of the company. You make money by selling the shares at a higher price than what you purchased initially. If the company does well, then the price of the shares rises while the price falls if it underperforms.
Are you ready to invest in Australian shares ASX market? You need to follow the step-by-step guide.
Step 1: Select the Australian Stocks you are Interested in
With a wide range of Australian shares ASX to choose from, you need to choose one that you are interested in. Most international investors invest in well-capitalized stocks in the ASX 200 index.
Step 2: Choose a Broker
The Australian shares you select are essential as the broker you choose. Choosing an online broker depends on which stocks you invest in and where you live. To buy shares, you need to place orders through a broker that has to be affiliated with Australian shares ASX.
However, when choosing a stockbroker, you need to keep these tips in mind; experience, type of stocks you want, technological infrastructure, a commission charged, and how often you wish to trade.
Step 3: Open an Account with the Broker
To sign up for a broker, you should be at least 18 years and an Australian resident. You are required to provide several documents such as
- Bank account details
- Proof of ID
- Tax file number (TFN)
- Your names, date of birth, address, and contact details
Depending on your broker, it only takes a few hours for your account to be approved. You may be asked to deposit a minimum amount to open an account, although it varies from one broker to another. You can recharge your account through credit card, debit card, BPAY, or bank transfer.
Once the account is approved, you can now start planning to buy Australian shares ASX of your interest.
Step 4: Plan to Buy Shares
Although shares can be a significant investment, they can be risky. You need to have a long-term view of the shares and short-term trading. So it is crucial to have a timeline and actions in case of some changes.
You need to ask yourself several questions, including;
- How much money can you afford to invest in stocks?
- How much can you afford to lose?
- What will you do if the prices fall?
- How long will your money stay in the stock market?
Once you have all the answers, you can now decide which Australian shares ASX you want to buy.
Step 5: Order your Stock
After choosing the shares, you need to place an order with the broker to buy the shares. The broker buys the orders from the respective stock exchange, where they’re electronically matched between sellers and buyers to transact at their respective prices.
If you are not willing to buy the Australian shares ASX at the current price and want a better price, you may place a buy stop order. This will allow you to decide the price for the transaction.
Step 6: Share Settlement
In Australia, the share settlement period is T+2 days but varies with countries. The share settlement is the process of transferring shares and funds between buyer and seller. The day of trade execution known as T Day and T+1 and T +2 are days when clearing and settlement occur. You need to know that you will not receive shares immediately after transaction but two days after transaction.
Buying Australian shares ASX isn’t different from purchasing other shares at the end of the day. You are just buying a small part of a company, and you will have a part of the company’s profits. With the help of the steps above, you will avoid all risks involved when buying shares.…