If you’ve been following the talk of the town for the last few weeks, you’ll know that Adore Beauty is set to list on the Australian Securities Exchange (ASX) on Friday, under the stock code ABY. Adore Beauty is an Australian e-commerce business and is the official stockist of over 230 leading beauty brands. It was founded by Aussie entrepreneur and CEO Kate Morris back in 1999, and has grown into a leading Australian brand.
If all this talk has got you thinking about investing for the first time, then you’ve come to the right place! I won’t talk too much about the process of investing in Initial Public Offerings (IPOs), which is covered in more detail here, instead, let’s focus on how to invest in a company once it’s listed on the ASX.
We have a free course that covers the essential information that you’ll need to know before investing in Australian shares, which I’d highly recommend bookmarking to complete when you have a few spare hours!
What are Shares Anyway?
A share of a company represents an ownership stake in a public company, so when you buy a share of a company, you are becoming a part-owner or a shareholder. Think of a pizza cut into a million tiny slices, so everyone has the opportunity to grab one.
A company might choose to offer its shares on the share market to raise money to grow, pay off debts and provide liquidity for shareholders. Once a company has listed on the ASX, it’s a very accessible way for everyone to become a part-owner of that company. You’re probably already a shareholder of many Australian listed companies (think CBA, BHP, Coles) through your superannuation, whether you know it or not!
Opening a Share Brokerage Account
If you’ve got your eye on purchasing some Adore Beauty Group Ltd (ASX: ABY) shares, the next step is to open an online brokerage account (if you don’t already have one). This will involve having a look at comparison websites like Canstar and Finder for details, to work out the right broker for you. Think of a brokerage site as the place that facilitates trades happening in the marketplace (ASX). You tell them what you want to buy, and they’ll send your order across to the market, to see if they can match you up with a seller.
When you’re researching which brokerage account to open, keep in mind the following:
- Brokerage fees – paid/deducted automatically when you buy or sell (e.g. $10)
- Account fees – can be monthly or yearly (tip: some don’t have them)
- Usability
- Fees for “extras” like market data or charting
- Responsiveness of customer service teams (this can be important during set-up)
- Option to trade international shares (most brokers only do Aussie shares, not US companies)
How Do I Buy Shares in Australia?
Once you’ve opened your brokerage account, you can search for the company via it’s stock code (e.g. ABY) and place an order to buy some shares. You’ll need to enter the number of shares you want to buy or the value you’d like to invest, choose your order type (either the current “market” price or use a “limit” price to pick the maximum price you’re willing to pay per share) and choose whether the order should expire at the end of the day if a buyer isn’t found or remain in the market until it expires.
Then you’ll just have to click, review and confirm, to send your order off into the market to find a buyer. Make sure you have funds available in your linked cash account to pay for the order if it goes through. The typical settlement timeframe for a share purchase on the ASX is two business days after the day your order is confirmed (T+2).
If you’re confused about anything or are unsure about whether investing is right for you, we recommend getting some assistance from a licensed financial adviser, because they’ll be able to help you decide on your risk profile, objectives and needs. Get in touch with a financial adviser using ASIC’s MoneySmart’s list of licensed financial advisers.
If you’re keen to learn more about investing in shares and personal finance, we’ve got the perfect solution for you! Tune into The Australian Finance Podcast on Apple Podcasts, Spotify, Castbox and YouTube.
https://open.spotify.com/episode/6gGaMRD5sfn416Jvu9O0pc?si=XBy4E3vnQ9yBaZJhJDCfjQ
