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Six Steps To Start A Share Portfolio


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So you are going to start your investment portfolio and begin to invest in some shares. Here are some steps to start you in the right direction.

Get On Line.

Today the best way to stay in contact with the market is to go online. Get yourself a computer, preferably a laptop, and an internet connection. A laptop is preferable because you can bring it with you when you move around on holidays or just when you travel away from home. Most areas these days have wireless connections at fast food restaurants. This comes in handy for checking prices and moving money into or out of accounts. At home you need to have a broadband connection and some charting software. Investigate the various types and costs associated with this. Some packages you can use for free during an introduction period. So now your on line, you need to setup a brokerage account.

Account Setup.

There are many offerings given by various brokers that you can setup an account with. Look at the cost of trading fees and read the fine print behind the contracts. Most trading accounts are linked to a cash holding bank account. Some brokers allow you to link to your existing cash bank accounts while others ask you to set up and apply for new accounts. You will have to download a series of application forms, sign them and post them back to the broker. This approval period can be more than a week. You will also need to deposit some funds into the account to get it started. Most brokers will accept minimum amounts of $500 dollars or less.

Company or Sole Trader.

There are tax considerations when buying and selling shares. As an investor, buying shares is usually a longer term proposition. As a share traders, your trades could be daily and as a result you will be subject to different amounts of payable tax. Speak to your tax consultant about this. Setup as a company may not be valid at early stages in trading or investing. The amounts traded and the frequency of trading becomes the main issues.

Technical vs. Fundamental

Looking at your trading style you may wish to investigate the methods by which you choose which shares to buy and sell. There are two types of analysis you can use, and each is a valid way to pick your shares. Some investors use fundamental analysis, while some traders use technical analysis. Others use both. Learning the difference between the two is important but out of the scope of this article.

Share Types

The types of shares you should start out buying would most likely be in the ASX 100 share listings. It would be prudent to start, by choosing from these shares as they tend not to fluctuate wildly in price and have demonstrated consistent gains and dividends over the longer term. When you become more familiar with the mechanisms of entering and exiting a trade to buy and sell shares, you can then investigate a trading strategy that suits your risk tolerance and lifestyle.

Lifestyle Choices.

Be aware that trading shares can become a daily activity and as such can tie up all your time. If you enjoy this style of trading then allow for rest breaks and exercise. Most traders and investors prefer to spend their time relaxing and not in front of the trading screens. This does become a lifestyle choice.

For more information on learning how to trade shares , visit

James McInnes is a professional share market trader and investment entrepreneur, with many years experience trading the Australian Share market. You can visit his site at for further information on trading the Australian Share Market


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