Losing Your Investment Virginity

Australians have officially fallen in love with the stock market.

And, according to the Australian Securities Exchange (ASX), guess which age group is leading the charge?

The Millennials.

Now there are two reasons why I think so many young people are interested in stocks right now:

The state of the housing market is just so freaking depressing, and stocks (and crypto) have been going up a lot … so it’s a chance to get ahead financially.

According to the ASX, there are 900,000 investing virgins who plan on getting in on the game next year.

So, if that’s you, here’s how to lose your virginity (and not regret it).

1. Go Marie Kondo

Last year — as lockdown hit — you probably watched Marie Kondo on Netflix, then immediately started rifling through your junk.

Here’s the thing: most people get swept up in something new for a brief moment … then forget about it.

(Seriously, go look at your sock drawer today.)

My advice?

Embrace your new-found interest in investing while it lasts. And my very best tip is to scratch your itch by sorting out your super. Seriously, it’ll take you a few hours to hunt down a low-cost, high-growth index fund, yet it is one of the most lucrative things you’ll ever do. While you’re at it, gather up any super funds you may have and consolidate them into the one low-cost fund.

Ask yourself: “Does my super fund spark joy?”

2. Don’t Bet the House

Here’s you: “I’ll boost my deposit savings by investing in the market.”

Here’s me: “Don’t do it.”

If you’re planning to buy a house in less than five years, don’t invest a cent of that money in the market.

I know you want to.

But take it from me: the returns we are seeing right now are not normal, and they will not last.

Case in point: strategists with Bank of America have estimated that, if things continue at the same rate for the remainder of this year, share funds will take in more money in 2021 than in the previous 20 years combined. Heck, Aussie shares just posted their biggest rise in 30 years.

Again, not normal. So repeat after me: “I won’t bet the house.”

3. Be Choosy

If you’ve sorted your super, squirrelled away your house deposit, and are ready to invest … go for it!

Just don’t buy Dogecoin, or you’ll end up with financial fleas. And don’t play games with financial apps that sweet-talk you with ‘super-easy’ $5 and $10 trades. Trust me, whatever you save on brokerage fees you could lose making dumb trades.

Instead, stick with boring, automated, set-and-forget investments. Pearler is a new app that’s doing good things, and the world’s second biggest fund manager, Vanguard, has just dropped its already low fees.

Barefoot says: “You only lose your virginity once. Make sure it’s with someone who’ll care about you in the morning.”

Tread Your Own Path!

Reminder: I first wrote about this years ago and highlighted the low costs. Today there are better deals on offer. How do I know? Because my readers constantly email me about them! So before you do anything, do a quick google.