First ASX Trade for Beginners: Consider a Broad ETF

For many beginners, a broad market exchange-traded fund (ETF) is a practical first investment because it holds a collection of securities rather than relying on the performance of a single company. If you’re exploring the Australian Securities Exchange (ASX), consider an ETF that tracks a broad Australian or international market, while remembering that diversification does not prevent losses.

Before placing an order, look at the ETF’s investment objective, holdings, fees, and the index it follows so you know what exposure you’re getting. Compare a broad market ETF with an individual stock: the stock gives you a more concentrated stake in one business, while the ETF spreads your investment across its holdings.

Choose an amount you can afford to leave invested and potentially lose, and make sure you have money available for bills and emergencies first. You can also practice following a potential trade on paper, noting the price, your reason for choosing it, and how you would respond if its value rose or fell.

Check the product’s listed specifications when evaluating practice before you commit.

Learn the difference between a market order, which seeks execution at the available market price, and a limit order, which sets the maximum price you’re willing to pay when buying. Review your broker’s trading fees and order details before submitting, because costs and price changes can affect the amount you pay.

Check the product’s listed specifications when evaluating keep your first order simple.

Our ASX Unlocked: A Beginner’s Guide to Trading Smart on the Australian Securities Exchange is a digital eBook for beginners who want to learn about trading on the ASX. For more on preparing for your first trade, read our beginner’s guide to your first ASX trade and take time to decide what fits your goals and tolerance for risk.

Check the product’s listed specifications when evaluating build your knowledge at your own pace.