10 tips for finding success as an investor

A collage of a hand pulling up a bar on a bar chart.

We’ve all got different ideas of what financial success looks like. There might be a dollar figure you want to reach, you might want a passive income for retirement, or maybe you’re trying to knock Warren Buffet off his gilded perch.

Whatever the case, it pays to take a step back every so often and review your investing habits to ensure you’re still on track. 

Or, if you’re a beginner share trader, we hope these ten tips that every investor should know help guide you down the path to success – however you personally define it.

1. Time in the market, not timing the market

You might have heard or read the phrase ‘time in the market, not timing the market’. 

The phrase basically means that rather than trying to guess when the best time to invest is (timing the market), your investment game plan should be played over the long term (time in the market). 

It’s all about staying invested through the good days and the bad, benefitting from the tendency of the market to grow year after year (with some exceptions, of course).   

A great way to illustrate the advantages of time in the market over timing the market is to look at the 2022 Vanguard Index Chart. In particular, we’ll focus on the growth of Australian shares over the 30 years from 1992 to 2022. 

According to Vanguard’s data, if you had invested $10,000 into a fund that tracked the Australian share market in 1992, by this year you would have an estimated $131,413 – excluding inflation and fees. 

So, while there are good days and bad days, the ASX 200’s tendency to provide an average annual return of about 9% can actually flatten out those big losses and, over time, relegate them to the realm of a distant memory.

Remember that past performance may not be indicative of future results. Invest responsibly! 

2. Hold your ground 

This tip relates to the previous one, in that it’s about weathering the storm of losses and bear markets.  

When you see the value of a market plummet, it can be tempting to join the race to the bottom by selling your holdings. However, it’s important to remain calm, as markets can (and have in the past) bounce back. 

Of course, if we’re talking about shares in an individual company, then there may be a good reason for investors to suddenly abandon ship. It could come as a result of an unfavourable business decision, cash flow problems, or another reason entirely.

Remain calm, do your research, seek financial advice, and make up your own mind. 

3. Diversify your portfolio

Diversification is the cornerstone of any successful investor’s portfolio. 

When you diversify your investments, you spread the risk around several different asset classes or industries, so that if one of your investments fails you don’t lose all your money in one go. 

Some assets will perform well in one year and badly the next. By having a hand in multiple assets or industries, you might be able to balance out any losses.

One way to build some diversification into your portfolio is by looking into ETFs, if you haven’t already. 

4. Make regular contributions to your investments  

If you can afford it, it’s a good idea to make regular contributions to your investments. One popular way to do this is known as dollar-cost averaging

By making regular purchases of shares you already invest in, you can help yourself to smooth out the ups and downs of the market. 

How? Well, you’ll essentially be lowering the average price of the shares you buy, so long as you’re investing the same amount of money each time. 

When the price is low, you’ll be purchasing more shares with your regular contribution amount. When the price is high, you’ll be purchasing fewer shares with your regular contribution amount. 

Eventually, it can balance out. It takes time!  

5. Reinvest your dividends

Another way to make regular contributions to your investments is to reinvest your dividends. 

By reinvesting your dividends, you can use them to buy more shares. This strategy can be done automatically if a company offers a dividend reinvestment plan (DRIP), or you can do it manually after receiving your funds.  

Company-provided DRIPs sometimes include discounted share prices, no brokerage for reinvestment, and the ability to reinvest dividends in fractional shares. DRIPs are a company’s way of incentivising you to stay invested in them. 

6. Give overseas markets a shot 

Like diversifying the asset classes and industries in your portfolio, diversification can extend to the markets you invest in, too.

There are many overseas indexes, such as the Dow Jones, S&P 500, FTSE 100, and Hang Seng, which you can invest in through share trading platforms or stock brokers.

As international markets are subject to different economic and social influences, you may be able to tap into growth opportunities that aren’t available in the Australian market.

7. Invest time in researching a company 

For those looking to invest in specific companies, rather than taking on ETFs, indexes, and managed funds, make sure you take some time to research the company in question. 

You’ll want to understand the following:

  • What the company does
  • How it generates revenue 
  • How it’s doing financially (balance sheets and cash flow reports) 
  • Trends in its share prices (is it tracking up or down?)
  • How competitive it is within its industry 
  • How hard (or easy) it is for competitors to enter its industry
  • What broader events or economic trends can influence the company? 
  • Does its product or service have an edge over similar competitors? 

While that’s a lot to take in and research, it could be worth your while when choosing a company to invest in. 

Some share trading platforms provide you with this sort of data, which saves you from having to crawl through annual reports and news articles to find out company info. However, the platforms that provide this type of data may charge higher fees to access it. 

8. Keep track of brokerage and other fees

Successful investors know that there’s no such thing as a free lunch, meaning you won’t always be able to invest without paying fees for brokerage and access to data and insights. 

However, if you’re able to minimise the fees that you do pay, all while having access to the share trading features you prefer, you could stand to save significantly. 

For example, if you’re signed up to a share trading platform that charges a monthly account fee of $19.95, then after five years you will have paid almost $1,200 in monthly fees alone – that’s a significant chunk of your potential investment returns gone. 

When you factor in the cost of brokerage (a.k.a. the cost of buying or selling shares), the money coming out may diminish your returns too. 

So, successful investors should weigh up the cost of monthly fees and brokerage against the included value of a share trading platform. 

Ask yourself, ‘Are the features that I’m paying for translating to a better return on investment?’. 

If the answer is no, then it may be time to compare share trading accounts to see if there are more suitable options out there. 

9. Stop checking your shares every hour 

If you’re the type to get glued to the screen, you might also be tempted to watch the stock market and your shares constantly. 

If you’re following a long-term, buy-and-hold strategy, and you aren’t a day trader, then stock-watching is only going to cause you pain – especially in bear markets. 

Seeing your shares go down on a daily basis might sway you to change your strategy or sell at the wrong time, instead of following your plans. 

Successful investors know that it’s about time in the market. 

10. Compare share trading platforms 

When you regularly compare share trading accounts, you’re helping yourself to stay on top of the latest features, fees, and limited-time offers. 

It’s important to check up on what’s out there every so often, as people’s needs change almost as frequently as the seasons.

For example, maybe you’re after an account that provides you with live market data, insights, and news when you’re starting out share trading, but after a while, you find you’re able to go off on your own. 

There wouldn’t be much point in paying a monthly fee for access to the features you won’t end up using any longer. 

However, with so many options out there, it can be hard to pick a few out from the crowd. So, start with a selection of some of the best share trading platforms, picked for their overall value in the 2022 Mozo Experts Choice Awards, or check out some of your options below.

Share account comparisons on Mozo - rates updated daily

Search promoted share trading below. Advertiser disclosure.
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    Mozo Experts Choice 2024
    Share Trading

    Small trade brokerage
    Monthly fee
    $3.00
    $0.00

    Invest in AU stocks, US stocks, HK stocks and ETFs on moomoo trading platform. US trades from $0.99 USD, other fees apply. Backed by a Nasdaq-listed fintech. (T&Cs apply).

    Details
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    ASX Shares

    Small trade brokerage
    Monthly fee
    $0.00
    $0.00

    Join the world’s leading social trading platform, trusted by 30 million users worldwide. Invest in stocks, crypto, ETFs and more - all in one place. Hone your financial skills with a $100K virtual demo account.

    Details
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    Mozo Experts Choice 2024
    Share Investing

    Standard

    Small trade brokerage
    Monthly fee
    $0.00
    $0.00

    CMC Markets Invest makes it easy to trade with a handy web and mobile platform, competitive pricing and thousands of securities. Buy Australian and US shares from $0 brokerage (T&Cs apply - see website for full details).

    Details
  • placeholder
    Tiger Account

    Small trade brokerage
    Monthly fee
    $5.50
    $0.00

    Tiger Brokers is an online broker listed on NASDAQ. It offers access to US, ASX & HK stocks, ETFs and US options trading. Earn 7% p.a. on uninvested cash balance up to AUD 100,000 for the first 150 days, with a value up to AUD 2,877. Plus get US$30 Tesla (TSLA) and US$30 NVIDIA (NVDA) shares with an accumulated deposit greater than AUD 2000. T&Cs apply – for full details, go to the Tiger Brokers website.

    Details
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    Share Trading

    Small trade brokerage
    Monthly fee
    $7.70
    $0.00

    Buy and sell with a low $7.70 flat fee per trade and access to all ASX Shares and ETFs to invest in with GO Markets. Enjoy dedicated local customer support, a regulated Australian company for trading ASX Shares and ETFs. Plus, enjoy $0 Brokerage on your next 15 trades! (T&Cs apply).

    Details
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    Idle Cash

    Small trade brokerage
    Monthly fee
    $5.50
    $0.00

    Receive interest on your uninvested cash. Deposit over USD/AUD 5,000 to start receiving 1.5% return; 2.25% return on over AUD 50,000; Up to 3.25% return on over USD 50,000. Mozo special offer for new users only: Get USD 50 fractional shares plus USD 25 Tesla shares with a cumulative net deposit of min. AUD 500 within 7 days of the first account opening. T&Cs apply.

    Details
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    Share Trading

    Small trade brokerage
    Monthly fee
    $8.00
    $0.00

    Enjoy access to over 13,000 local and international shares and ETFs with $0 Commission on all international shares including US. Trade pre- and post-market with extended hours on over 70 key US shares. Get better rates on domestic shares for active traders - trade Australian shares from $5 commission. (T&Cs apply). Around the clock customer support from real humans (not chat bots). Trade international and Australian shares from the one account with intuitive desktop and mobile app.

    Details