Shares can play a pivotal role in a successful overall portfolio, with many Australians benefitting enormously from the wealth this type of investment can generate if left to flourish over a long period of time.
But buying and selling shares is far from a simple procedure or exact science, meaning it is generally unwise to head down this road without expert advice and some serious thought about what you are hoping to achieve.
What is the number one reason for investing in shares?
For most people the answer to this question comes in the form of a proven track record for delivering profits.
Over time, well chosen shares historically outperform the other main asset classes in a retirement plan such as property, cash and fixed interest.
That is not to suggest that these alternative forms of investment should not play an important role in your diverse and risk-conscious financial plan, but it can pay to remember that when viewed from a long-term perspective the share market often delivers the best rewards.
You can invest in shares a number of different ways, but the most common method in Australia is to start the process through your superannuation account. The main alternatives to this strategy are to invest directly or via a managed fund.
In the case of a managed fund your investment manager will research the market with you, as well as buy and sell on your behalf whilst bearing in mind your personal tolerance for risk.
By choosing to research and invest independently you can avoid the fees associated with expert advice and exercise control over your own money, but on the flipside you will also incur full responsibility for trades and be kept very busy updating your knowledge on a constant basis.
