Ask Paul: Advice on how to start investing in shares?


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Q. I am seeking some advice on behalf of my 20-year-old son, who is a second-year engineering student at university with a part-time job in IT earning about $20,000 a year.

He is keen to take up an active interest in investing/trading on the stockmarket (outside his superannuation fund).

Being time poor, he would like some ideas on where and how to start investing in shares and the various options open to him at this stage. - Craig

paul clitheroe ask paul how to start investing in shares

It is great to see a 20-year-old interested in investing, Craig.

Engineering has a lot of face-to-face lectures, so I am sure he is time poor.

A good option might be exchange traded funds (ETFs).

These would allow him to select areas of interest, which could include technology, emerging markets, international shares, small companies and so on, but he would not have to make individual share selection decisions.

I like youngsters getting into some sensible share trading, because it is a great learning experience.

But time is always the problem.

Equally, I would not have an issue with him buying a small portfolio of stocks and following these.

This will need a bit more time and doing an online ASX share course would really help here.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.