The ASX is one of the worlds busiest and fastest growing markets. What to buy and how to buy can seem like a very daunting process.
There are so many voices to listen to, and so many companies offering deals on trading.
For some people it can get very overwhelming, making the whole process seem too hard, causing them to miss out on great buying opportunities on the ASX.
Keep these key points in mind when considering taking advice on what to buy on the ASX and how to buy it.
Clear your debt before investing
Whilst you may hear many stories of friends, or friends of friends who have made good on the ASX, for every couple of good news stories there can be a bad one. It makes far more sense to commit any extra funds you are looking to invest on the ASX, into clearing your own debt and reducing cumulative interest rates than it does to risk your hard-earned money on the stock market.
So what next now that you are debt free?
You are ready to buy on the ASX!
Do I need professional advice?
Preferably yes. But not necessarily. The main thing is to do as much research as possible. Whether it is on the company you are looking at setting up an ASX account with to buy and trade stock, or an individual who is offering a subscription service on hot stocks on the ASX to buy, or even just learning about the ASX itself. The more research you do the more likely you are to not make monumental mistakes and start profiting from the ASX.
You will make mistakes. The important thing is to learn from them!
Better still, talk to other friends who have bought on the ASX and ask them about their mistakes. It is far better to learn from them, and not make the same ones, than it is to sink with your own money.
Active or Passing investor on the ASX?
Once you’ve done your research and are confident to sink funds into the market you need to formulate a strategy for your investing. Are you and active or passive investor? Perhaps a little of each is the right way for you.
As a stock holder in a company, you may be rewarded regularly with a dividend. Do you reinvest your dividend or look to spread your portfolio and buy into a new ASX company?
Or are you simply looking to buy low and sell for a profit on a quick turn around?
There are many strategies, and the best way to maximise your chances of success is by having a well researched plan and staying with it for a set period of time in order to assess its merits properly.
Who to take advice from when I’m looking to buy on the ASX?
There are literally thousands of individuals and companies offering stock tips. From free ones in your local paper, right through to large organisations offering high-cost subscription based services.
These all come at a risk and finding out which one is better than the other can be a costly and time consuming exercise.
Depending on your budget, it is wise to start at the lower end of subscription-based services which provide tips to buy on the ASX. Once you are familiar with them, they may lead you into more expensive premium services they have on offer or you might have had some success on the ASX and can now look at a different service provider you have seen advertised or have been advised about by a friend.
Most have the best intentions, but again, research is the key.
Take these tips on board when looking to buy on the ASX, and hopefully you will be on your way to making a rewarding second income.