What it takes to be a winner

Stick to the basics – and keep it simple – when you start playing the sharemarket game

- DANIELLE ECUYER

Planning prevents piss-poor performance. I love this statement. It was the catchcry for my son’s team during his school rowing seasons and it’s good general advice. It applies to many things from sport to finance and everything in between.

Armed with the knowledge you can plan for your investment portfolio or how you’ll adapt what you already have. It’s never too late to weed and prune what you’ve got or to invest in some new shares.

Planning the “best” investment portfolio for you will require a little preparation but nothing too arduous. Here is a go-to list of points to consider when starting out.

First-time investor

Are you a student or a young professional saving for a holiday or housing deposit? You can start a portfolio with as little as $500. The less money you have the simpler and more risk-free the investment should be. It’s just not feasible (from a cost standpoint) or reasonable to think that you should buy five to 10 separate shares at $100 each. For anything less than, let’s say $2000, as a first-time investor, you should probably only consider buying one exchange-traded fund to start, such as an exchange-traded fund (ETF) that replicates the ASX 200 share index, for example. You can keep contributing to that until it reaches a critical mass of $5000. You could then consider adding some shares, but anything less than $1000 per share is just not worth it. Better to keep adding to the ETF and grow that.

For savings of $10,000-plus you can start to look at the model portfolios that suit your age, risk tolerance and commitment level.

Inheritance money