What Stock should I Buy as a Beginner in Australia?
Please note that any research that we publish does not take timing into consideration. We may publish research for a stock that we believe is of good quality but not necessarily trading at a discount or at a technical level for a high probability entry. If you would like to maximize your returns with optimized entry, exit and stop loss levels.
Today, we’ll look at the best Australian shares to buy on the ASX in 2023 that we think are the best growth stocks. Some of these best growth stocks have already made strong gains and have a lot more upside potential to go.
What Stock should I Buy as a Beginner in Australia?
We’ve outlined the 5 best growth stocks to buy that we have found to have a good business plan with lots of upside potential and represents some of the best that the ASX has to offer.
Sources such as a company’s annual report, as well as its yearly and half-yearly financial results statements, can be good places to find relevant information. These can be found by searching for the company name on the ASX website.
Also read What are best stocks to invest in Australia?
Table of Contents
What is a share and how do I buy one?
At its simplest, a single share represents a single unit of ownership in a company.
Companies such as Commonwealth Bank of Australia, Rio Tinto and Woolworths are listed on the Australian Securities Exchange (ASX) — commonly known as the stock market or stock exchange. Although these big names are among the most well-known, more than 2,000 companies are listed on the ASX.
When you buy shares in one of these companies — even a very small number of shares — you then own a small part of that business.
You need to use a third party, called a ‘broker’, to conduct the actual transaction of buying or selling shares.
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The Best Australian Stock To Buy 2023
People aim to make money from investing in shares through one, or both, of the following ways:
An increase in share price. Usually known as ‘capital growth’ or ‘capital gain’, all this means is that you make money by buying your shares for one price and selling them for a higher price. Conversely, it’s important to remember that if the share price falls below the amount you paid and you sell your shares at this lower price, you would lose money.
A share in the company’s profits. Usually known as ‘dividends’, these payments are a portion of company profits paid out to shareholders, usually twice a year. Companies don’t have to pay dividends, but many see it as a way of returning earnings to their shareholders.
Researching and choosing companies to invest in can be enjoyable and there are lots of tips and recommendations to guide you through the process.
MoneySmart suggests starting with companies in an industry that you know something about, as this may make it easier for you to understand how a business is doing.
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There are some stocks to buy 2023 in Australia:-
Iluka Resources (ASX:ILU)
Iluka Resources (ASX:ILU) is an Australian mineral sands producer with an upcoming integrated rare earth processing plant. Mineral sands, the company’s main product, has extensive use in high-temperature applications such as refractories, pigments manufacturing, and ceramics, while the rare earth segment would be key to high-performance magnets and other components of an array of electric products including cars, turbines, and batteries. Iluka’s main assets are located in Australia, namely, Cataby, Jacinth Ambrosia, Eneabba, and Sierra Leone, South Africa. The company also has three more assets under development in Australia.
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Arizona Lithium (ASX:AZL)
Arizona Lithium Limited (ASX:AZL) is an Australia-headquartered mineral exploration and development company focused on exploring for lithium at its Big Sandy and Lordsburg Projects in the states of Arizona and New Mexico respectively in the USA.
The company has identified a current resource of 320,800 tons of Lithium Carbonate Equivalent (LCE) from 4% of the landholding at Big Sandy. Testing has achieved high-quality battery-grade Lithium Carbonate of 99.8% purity (Battery Grade > 99.5% purity) at Big Sandy.
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Mineral Resources (ASX:MIN)
Mineral Resources Ltd. (ASX:MIN) is a large, integrated Australian mining company with a significant market presence in both mining services/infrastructure and the production of commodities such as lithium and iron ore. The company has enjoyed excellent business conditions in recent times in mining services, while its commodities business was hit by the correction in ore prices in the second half of 2021. Its fortunes were, however, buoyed to some extent by a burgeoning lithium market.
It has three major divisions: Mining services, where the company is a contract service provider for mines owned by other companies; Commodities, where the company is an owner, producer, and processor of iron ore and lithium products through Joint Ventures and complete ownership; and lastly, Energy Resources, the company’s natural gas division that owns a production site to provide stable and emission-free energy to its client and own production sites.
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Xero is one of Australia’s biggest and most successful tech companies. The company has slowly morphed from a niche SaaS (Software-as-a-Service) company into a tech conglomerate due to strong sector tailwinds and gradual but consistent growth. While the company is still somewhat richly valued despite the recent correction, its growth prospects and opportunities make it an attractive proposition. The pandemic has accelerated the already rapid growth of digitisation and business processes, a trend which Xero has benefited from.
Pilbara Minerals (ASX:PLS)
Pilbara Minerals Ltd (ASX:PLS) is one of Australia’s biggest listed pure-play lithium mining players. The company has lately been in the limelight due to the solid rally in its stock and its recent acquisition of Altura Mining for $175M. The deal is a good fit for Pilbara Minerals because Altura’s Pilgangoora mine is adjacently located, making the acquisition easy to integrate and generate economies of scale.
Pilbara Minerals was also recently inducted into the ASX200, Australia’s flagship index. The company’s stock has been having a great run being front-and-centre of the decarbonization megatrend, a thematic investor favourite.
How Do We Find Growth Stocks To Buy?
Growth stocks are generally driven almost entirely by qualitative factors such as first mover advantage, quality and quantity of assets, permits and technology. Quantitative factors such as profit, revenue and so forth generally take a back seat. Even though it is imperative that their financials are sound, when it comes to growth stocks, we are buying the story and perceived future value.
However, the very nature of valuing companies through qualitative factors means that there is a lot of room for error, opinion and subjectivity. This means that high growth stocks tend to be small-cap, high risk and highly speculative. The hardest part when it comes to finding growth stocks is the ability to process the information and factors at hand to make a good judgement call.
Our Research team specialises in this and has combed the ASX for some of the best growth stocks on the Australian market.
Also Read 10 Common Mistakes Every New Investor Need to Avoid
This is general advice only. MF & Co Asset Management has not considered your personal financial needs, objectives or current situation. This information is not an offer, solicitation, or a recommendation for any financial product unless expressly stated. You should seek professional investment advice before making any investment decision.
10 top investment options for young Australians in 2023
Stepping into the world of financial investments can be an exhilarating, yet intimidating, experience for young Australians. Up until now, investing has likely been something you’ve heard about from friends and family, but never considered for yourself. But that doesn’t have to be the case, as the younger you begin investing, the greater your returns may be over your lifetime.
Our top ten picks for investments to consider for young Australians include:
- Managed/index funds
- P2P lending
- Savings accounts
- Term deposits
It may be possible to turn a small sum of spare cash into a sizeable nest egg of wealth, simply by investing your money in a way that suits your financial goals. So, if you’ve got cash to spare, and you’re looking for ways to make it grow, it may be worth considering investing.
When it comes to investment options for younger Australians, it’s safe to say that most of us have felt more pressure to invest in cryptocurrency than to do drugs.
We’ve all heard the stories of friends of friends that put their money into Bitcoin, and other blockchain-based cryptocurrencies or altcoins, and saw their investments balloon into the six- or seven-figure return range. However, there are also plenty of stories of people eagerly investing in a hot new cryptocurrency, only to see the value stagnate or tank, or for the whole thing to disappear into thin digital air, leaving a lot of angry investors out of pocket.
Equities (another name for shares, stocks, or securities) is what many people think of when you mention investing. Getting into equities trading can sound intimidating at first, especially if you’re not familiar with share markets. But nobody expects you to become Jordan Belfort overnight. It is okay to start small or stay at whatever investment level you’re comfortable with.
There are many ways to start investing in equities. If you want to choose which shares you buy and sell, an online broking service can facilitate your transactions for relatively low fees per transaction. A full-service stockbroker will likely charge you more, but may be able to provide personalised advice, which could be valuable if you’re not sure where to invest.
3. Managed/index funds
In a managed or index fund, many investors put their money into a shared pool, which is used to invest in a range of assets. The returns you enjoy will be based on the value of these assets, along with how much money you’ve put into the shared pool (your units in the fund).
Some managed funds are active funds, where an investment manager will search for high value stocks and invest the pooled money on the group’s behalf (for example, Microequities Asset Management). You’ll need to put a lot of trust in your fund manager, so you’ll want to be confident in their skills. You may also need to pay fees for their services.
ETFs, or Exchange Traded Funds, are almost a hybrid of equities and index funds. Much like a regular index fund, ETFs invest their wealth into a range of assets from a particular class (e.g. shares, currencies etc.). The difference is that rather than buying units in an ETF, like you would with an index or managed fund, you can buy shares in an ETF, just like buying equities on the stock exchange, and these can also be sold or traded if you choose.
For many young Australians, it’s hard to take property seriously as a viable investment opportunity due to the sheer price-point required for entry. So much has already been written about how difficult it can be for younger people to get a foot on the property ladder. Between six-figure deposit minimums, rising interest rates, and battling it out with upgraders and cashed-up boomers at the auction, purchasing property for an investment may not feel possible for you.
6. P2P lending
A simplistic way to describe peer to peer (P2P) lending is “like Uber, but for money”. P2P lending essentially involves one person who wants to borrow money being put in touch with someone who wants to lend money. While an arrangement like this could be theoretically sorted out between mates and mates-of-mates down at the pub, it’s usually facilitated by third party websites instead, such as Plenti, SocietyOne, Harmoney or Now Finance.
If you’re the lender in a P2P arrangement, you can earn interest from the money you lend, almost as if you were a bank. While you can pick and choose the borrowers you lend to personally, there aren’t as many guarantees in place for P2P lending as there are in more traditionally structured investments or lending.
7. Savings accounts
The humble savings account. You’ve likely had one since you were a kid, or since your parents made you sign up to one when you got your first job.
As one of the simplest investment options available, a savings account is different from a typical bank account, as it lets you earn interest on the money you deposit. This encourages you to keep making deposits and avoid making withdrawals, as the more money you can put in a savings account, and the longer you can leave it there, the more interest you can earn and the faster you can reach your savings goals.
8. Term deposits
If you have a long-term goal for your money, a term deposit can offer a reliable, low-risk way to make progress towards this goal. A term deposit is similar to a savings account, in that you deposit your money with a bank and leave it to earn interest over time. Often, the longer the term you agree to deposit your money for, the higher the rate of interest you can earn.
The appeal of a term deposit, like a savings account, is that it is considered one of the lowest risk options to grow your initial deposit into a larger sum. The main difference between a term deposit and a savings account is that there’s no easy way to make withdrawals from a term deposit. Once you’ve locked your money in the account, it will stay in there until the end of the fixed term – or you’ll face a costly penalty.
If you work for an employer, then a minimum percentage of your pre-tax wage or salary should be automatically paid into your super fund. This amount will continue to rise until it hits 12% in July 2027. Your superannuation contributions don’t just sit in a bank account somewhere until it’s time to retire – it also earns interest, much like money in a savings account or term deposit. Some super funds also invest your money in various assets to further grow your retirement wealth. You may not be aware that you can choose the risk level and type of investments for your superannuation.
For a truly old-school investment, you may consider buying up big bricks of the shiny stuff. One of the reasons gold remains a popular investment in the modern age is its long-term stability and consistency. Even if the stock market crashes, the property bubble bursts, or cryptocurrency burns to the ground, gold is expected to remain a valuable commodity in many markets.
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