Investing in the share market can be one of the smartest ways to grow your wealth over time. But for beginners, figuring out how to buy shares in Australia can feel overwhelming. From understanding what shares actually are, to choosing between online brokers or full-service advisors, this guide breaks down everything you need to know before making your first investment.
What Are Shares?
Shares — also called stocks, securities, or equities — represent ownership in a company. When you buy a share, you become a part-owner, which gives you:
- The right to receive dividends (profit distributions)
- Potential capital growth if the share price increases
- Voting rights at shareholder meetings
You can invest directly by buying shares yourself, or indirectly through a managed fund, where your money is pooled with other investors.
How Investing in Shares Works
When you buy shares, you’re essentially betting on a company’s future growth. If the company grows, so does your investment. Returns typically come from two sources:
- Dividends – Payments from company profits
- Capital Gains – Profit from selling shares at a higher price than you paid
Shares are bought and sold on the Australian Securities Exchange (ASX), and prices fluctuate based on demand, company performance, economic data, and market conditions.
Step 1: Decide How You Want to Invest
Option A: Online Broking Service
- You open a trading account and make your own buy/sell decisions
- Fees are lower, starting at around $20 per trade
- Ideal for independent investors seeking low-cost access
Option B: Full-Service Broker
- A professional manages trades and gives you tailored advice
- Fees are higher, often a percentage of the trade value
- Up to 2.5% on smaller trades (under $5,000)
- As low as 0.1% for very large trades
- Best for those seeking expert support and personalised service
Step 2: Open a Trading Account
To buy shares, you’ll need a trading account linked to a bank account. Whether you choose an online or full-service broker, the process typically involves:
- Providing ID and financial details
- Depositing Australian dollars
- Searching for shares listed on the ASX
- Placing buy or sell orders
Step 3: Make Your First Trade
Once your account is funded:
- Choose the company you want to invest in
- Enter the number of shares to buy
- Review fees and confirm the order
- Track performance in your trading dashboard
Costs to Consider
- Brokerage Fees – Charged every time you buy or sell shares
- Percentage Fees – Common with full-service brokers
- Minimum Trade Amount – Some platforms require a minimum of $500 per transaction
Tips for New Investors
- Start Small – Build confidence by trading with a small amount
- Diversify – Don’t put all your money in one company
- Do Your Research – Use trusted sources like the ASX education centre
- Think Long-Term – Historically, shares reward patient investors over time
Conclusion
Learning how to buy shares in Australia is easier than many think. With online tools and broker support widely available, anyone can begin building wealth through the stock market. Whether you’re seeking long-term growth, regular income, or both, investing in shares is one of the most effective ways to participate in a company’s success.
FAQs
1. What’s the minimum amount needed to buy shares in Australia?
Most brokers require a minimum trade size of around $500.
2. Do I pay tax on shares?
Yes. Dividends are taxable, and you may owe capital gains tax if you sell for a profit.
3. What’s the cheapest way to buy shares?
Online brokers offer the lowest fees and are ideal for DIY investors.
4. Can I invest in shares without much knowledge?
Yes, by using full-service brokers or managed funds where experts handle the decisions.
5. How do I know which shares to buy?
Research financial news, company fundamentals, and ASX market insights to make informed choices.
* The information is not intended to be and does not constitute financial advice or any other recommendation of any sort offered or endorsed by Gate.
