INVESTOR EDUCATION
Beginner’s guide to smart investing
Start your investment journey today—discover the essentials of investing for beginners and build a strong foundation for your financial future.
Key steps
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01
Heading: Getting Advice
Starting a long-term savings or investment plan can be daunting. If you don’t feel confident selecting your own investments, it’s essential that you get good advice on the best options available to you.
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02
Essential questions
With so much to choose from, the world of investing can be confusing at times. To help, it's important that you define your investment goals and understand your own risk tolerance.
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03
Asset classes explained
Another key part of getting started with investing is selecting your mix of asset classes. Asset classes consist of a group of securities with varying degrees of risk.
Investing for beginners
Investing can be key to improving your financial wellbeing, but it can be complicated to understand when you’re getting started.
If you’re thinking about investing for the first time, BlackRock recommends that you see a qualified financial adviser before making a long-term decision.
All investments involve some degree of risk, and your money may be tied up for some time, so it’s important to act on the best advice available before you invest. Alternatively, you can contact us for all general enquiries between 8:30am and 6:00pm (AEST), Monday to Friday. Please note that our team are not authorised to provide any financial advice.
Getting advice
Starting a long-term savings or investment plan can be daunting. If you don’t feel confident selecting your own investments, it’s essential that you get good advice on the best options available to you.
Australia has a large network of professional financial advisers who can help you select the best financial solutions for your needs. Many operate independently and can offer advice on the whole market.
If you would like the advice of a registered financial adviser, you can locate your nearest adviser through the Financial Advice Association of Australia. Please note that this link will take you out of the BlackRock website, and we do not have any control over the information that may be available on this site.
BlackRock cannot provide financial advice, but you can contact our dedicated Investor Services team for help with information about our funds or any other BlackRock enquiries.
Essential questions
With so much to choose from, the world of investing can be confusing at times. To help, it's important that you define your investment goals and understand your own risk tolerance. Consider the questions below to help you get started:
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All investments carry a trade-off between risk and reward. The more risk you’re willing to take, the greater the opportunity for significant capital growth, and unfortunately, the greater the scope for losses. For example, if you’re nearing retirement, you may want a lower risk approach, to avoid losses that you won’t be able to recoup. If you don’t need to access your money for many years, you may prefer a higher risk approach, knowing you can adjust your strategy over time. BlackRock offers funds that span right across the risk spectrum. View our products to learn more >
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Your reasons for investing, e.g. school fees, retirement income or a second home can influence how long you invest for. It’s important to know your timescale. One to three years? Three to five years? Five years or more? In general, the longer you invest for, the more opportunity you have to ride out any periods of market volatility.
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Your investment choice will depend on whether you want your savings to increase (in other words, give you capital growth) or give you regular payments (that’s to say, a steady income). Generally speaking, younger investors are normally interested in capital growth, while older investors may rely on income from their investments to finance some of their everyday spending. Some investors may prefer a balance of both growth and income.
BlackRock has a range of funds that may suit a range of investment goals, from capital growth to income – see our full product range here.
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It’s important to decide on the amount and frequency of your investment. Maybe you have a lump sum from an inheritance or property sale, or you’re looking to invest a regular amount from your salary. Or perhaps you’d prefer to make irregular ad hoc payments. Your final decision may be a balance of what’s affordable within the overall scope of your finances.
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If you’re confident in your own skill and judgement, you may wish to make your own investment choices. Alternatively, you might want to consult an independent financial adviser, to help you select your investments or even just to compare notes on the latest market information and fund choices.
If you would like to use a professional financial adviser, you can find more information in the ‘getting advice’ section above.
Asset classes explained
Another key part of getting started with investing is selecting your mix of asset classes. Asset classes consist of a group of securities with varying degrees of risk. There are three main asset classes:
Equities
Equities (also known as ‘ordinary shares’, or ‘shares’) are individual stocks issued by a public limited company and are traded on the stock market. When you invest in an equity, you buy a share in a company, and become a shareholder. Equities have the potential to make you money in two ways: you can receive capital growth through increases in the share price, or you can receive income in the form of dividends. Neither of these is guaranteed and there is always the risk that the share price will fall below the level at which you invested.
Common ways to invest in equities include:
- Direct ownership - usually through an online share trading account
- Actively managed funds - where a fund manager selects the equities they believe will perform best
- ETFs – index funds which track the performance of a particular group of stocks (e.g. the S&P/ASX200). For information on how to invest in iShares exchange traded funds (ETFs), please visit Buying ETFs >
Bonds
Bonds, also referred to as fixed income securities, are issued by companies and governments as a way of raising money and are effectively an ‘I.O.U’. Bonds provide a regular stream of income (which is normally a fixed amount) over a specified period of time and promise to return investors their capital on a set date in the future. Once bonds have been issued, they’re bought and sold between investors without the involvement of the issuer. Bonds are generally considered to offer stable returns, and to be lower risk than equities – which means that they also deliver lower returns than equities.
Common ways to invest in bonds include managed funds, where a manager selects the bonds they believe will perform best; and ETFs, which track the performance of a particular basket of bonds (e.g. the Bloomberg Ausbill Bank Bond Index).
Cash
Cash is usually held in a bank account which pays interest to the account holder. Alternatively, cash funds use their market power to get better rates of return on deposits than you would get in an ordinary bank account. They often invest in very short-term bonds known as ‘money market instruments’, which are essentially banks lending money to each other. In addition, cash funds can provide exposure to global currencies, which may not be easy to purchase on the open market and could be costly transactions.
Want to find out more about some of the different investing options available? Visit our Product Page for more information on the funds that BlackRock offers.
