Getting Started with Shares
The Australian Securities Exchange (ASX) is one of the world's top 15 stock exchanges with over 2,200 listed companies. Investing in shares has historically returned 9-10% per year including dividends, significantly outperforming savings accounts. For Chinese migrants building wealth in Australia, understanding the share market is an important financial skill.
Opening a Brokerage Account
You need a brokerage account to buy and sell shares. Popular platforms for beginners:
| Platform | Brokerage Fee | Best For |
|---|---|---|
| CommSec | $5-29.95 | CommBank customers, research tools |
| Stake | $3 (ASX) | Low cost, simple interface |
| SelfWealth | $9.50 flat | Flat fee regardless of trade size |
| CMC Markets | $0 (first trade/day) | Active traders, free first trade |
ETFs: The Easiest Way to Start
Exchange Traded Funds (ETFs) are baskets of shares that trade like a single stock. Instead of picking individual companies, you buy the entire market or sector in one trade. This provides instant diversification and is recommended for beginners.
Popular Australian ETFs: VAS (Vanguard Australian Shares — top 300 ASX companies), VGS (Vanguard International Shares — 1,500+ global companies), A200 (Betashares Australia 200 — lowest fee ASX ETF at 0.04%), NDQ (Betashares Nasdaq 100 — US tech giants). A simple portfolio of VAS + VGS gives you exposure to both Australian and global markets.
Dividends and Franking Credits
Australian companies pay dividends (a share of profits) to shareholders, typically twice a year. Many dividends come with franking credits — a tax credit because the company already paid tax on those profits. Fully franked dividends mean you get a tax credit for the 30% company tax already paid. This is a unique Australian advantage that can significantly boost after-tax returns, especially for lower-income earners who may get a tax refund from franking credits.
Tax on Shares
Capital gains tax (CGT) applies when you sell shares for a profit. If held for more than 12 months, you get a 50% CGT discount — only half the profit is taxed. Dividends are added to your taxable income but offset by franking credits. Keep records of every purchase (date, price, brokerage) as you will need this for tax returns. The ATO pre-fills most share income data in your tax return.
Beginner Strategy
Start with a regular investment plan — invest the same amount every month regardless of market conditions (dollar-cost averaging). This removes the stress of trying to time the market. Begin with broad ETFs, not individual stocks. Never invest money you need in the next 5+ years. The market will go up and down — stay disciplined and don't panic sell during downturns.