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Blog | Stockmarket Investing: 3 Simple Tips

Alexi Guagas
Senior Associate Adviser
20 Oct 2021

Following on from Glenn Fairbairn’s blog of last week, I have put together three simple tips to help you get started or to become better at investing in the stock market.

There’s a lot of jargon and noise in markets and it can complicate everything, especially if you want to be relatively stress-free while investing. Ideally, you want to be in a position where you feel comfortable with your decisions and purchases.

First tip, mindset – you have to be a moderate optimist at a minimum to invest. If you think the world is upside down and financial markets are rigged, best focus your mental capacity elsewhere. World economics and markets will be disjointed at times but to compound returns you must believe in the advancement of humankind and delayed gratification (a long-term game).

The second tip, make an informed decision – at Hewison Private Wealth we stress “we do not time markets”, timing the market can be extremely hard to predict and risky. Therefore, to remove this element of risk, the best approach is to find good quality companies by focussing on the following.

  1. You believe in the company, and you like what the company does.
  2. You understand how the company earns revenue and generates profit.
  3. You believe the company will earn more revenue and generate more profit in five years than it does today.
  4. If you don’t know how the company earns revenue, then you must undertake research on the company.

Without this understanding, you will find it very difficult to make an informed decision.

Third tip, skin in the game – having your foot in the door is the only way to become better at investing. Sure, you will make mistakes and have some wins and losses along the way. But this experience is invaluable, particularly if you are young and starting out on an investment journey. Educating yourself and building your interest in the market, will happen a lot quicker once you start!

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.