What Are Shares And How Do I Get Involved?

A basic bitch guide.

Tell us, Margot. Source: Amazon.

Guys, I recently tried to shares. Not a typo. Like, what are dividends? Why do some people know? When did you all learn about the different types of red wine also? (Okay I'm veering off topic).

Last year, we had a chat with investor Adam Schofield of Sharp and Carter. He gave us a rundown on shares if you were like me and you were like, YAY I'll do it now, then promptly forgot about it and started watching Upload (where Season 2 at?) It's okay, here it is in a new and updated format.

Scho, hiii! Sooooo good to be here hun and thanks for having me! I'm interested in you already. Yep. So...a share is a unit of ownership in a company, when investing in the Australian market these companies will be listed on the ASX (Australian Securities Exchange). The easiest way to get started is to download the CommSec app and create an account that is free to set up. From there, I would suggest setting up a 'watch list' where you can monitor the share price of each company you’re considering investing in.

But how do I know what should be on my watch list? Worthwhile of thinking of industries or companies that are set up to perform well through the COVID saga (Coles, pharmaceutical) or that will bounce back quickly that are cheap (Webjet, Qantas etc). Try not to sell within 12 months of buying - pay more Capital Gains tax if so.

Why do I wanna do it? Cbf, I have two eps left to watch of Morning Wars. The concept is simply buying at a certain price and hopefully selling your share for a higher price in what you bought that for - as well as being eligible for dividends (distributions) on their profits each reporting period (every six months).

So...what should I be doing? The cliche saying is 'buy low, sell high' and the corona-virus pandemic has fast-forwarded the steep dip we were already expecting across the global markets. For some, now can be a great opportunity to snap up some cheaper shares given they’ve fallen over the past three to four weeks, but I still think there is still an element of risk given the uncertainty and whether the market has bottomed out for now. Some personal rules I go by include:

• When buying, I am thinking of a medium to long-term investment (e.g. don’t spend cash that you will need in the next two to three years).

• Share prices will naturally rise and fall, but I never want to feel pressured to sell at a loss if I need to access the money.

• In the beginning, I stayed away from 'small-cap' stocks, or friends saying they had a 'hot tip'. Yes you may get lucky, but there is a lot of risk in the process.

• I made sure to diversity my portfolio as best I could, which may mean investing in three-five different businesses and not investing all of my eggs into one basket

What do I need to get started? A trading account like Commsec, or a micro-investing app.

So it's like gambling. Red or black? I'm always black. On an excitement level, is watching the share market: like watching paint dry (1) -like watching your Uber eats driver en route (1 to me, 10 to my partner) or like watching Taylor Swift's reputation tour on repeat (11/10)? For me, I check the ASX daily so I would rate watching it a good 7 or 8 / 10.

**Please note this is not financial advice and is author and guest's opinion only. Please see your financial advisor for tailored advice to suit you and your situation aka please don't sue me. *No affiliate. Would be great if they wanted to tho. Would froth selling out.