I'm a pre-university/college Australian student who has recently (last 2 months) come across the idea of investing. I have amassed around $1000 of entirely spendable money as I have no debts or living expenses (still at school, living at home). After reading numerous articles online about the concept of investing, the structure of the market, etc. I have found myself at somewhat of loss as to what direction to turn to for my very first investment.

My primary questions is related to the types of investment vehicles (methods of investing money to turn a profit) and their strengths/weaknesses as they apply to my situation. I have read that ETF's are quite a good starting point due to their ability to track indexes and therefore keep high levels of stability. Specifically, I have noticed Vanguard as a possible fund to look at. Can anyone verify that ETF's (specifically Vanguard) would be the best investment option for me? If it is the case that ETF's are not the best method of investing my money at this point in time, could someone point me in the right direction towards a better investment option?

I'm sorry if this sounds like the ramblings of a novice, but as I'm sure you all can sympathize there is a stupid amount of conflicting and constantly changing information about this subject on the internet and because of this I'm struggling to find consistent information. Hopefully I can get a reasonably coherent answer from someone here at StackExchange.

Thanks in advance!

2 Answers 2


You have a comparatively small sum to invest, and since you're presumably expecting to go to college.university soon, where you may well need the money, you also have a short timescale for your investment. I don't think anything stock-related would be good for you -- you need a longer timescale for stock market investments, at least five years and preferably ten or more. I don't know the details of Australian savings, but I'd suggest just finding a bank that is giving a good interest rate for a one-year fixed-term savings account.

  • My time scale isn't really set, but I want to avoid risk as much as possible so I imagine that a longer term investment is better. Considering that I can allow for longer term investments, what stock market options would you suggest? Are index funds comparatively better to individual stocks in companies due to their stability (and therefore risk aversion)?
    – RileyH
    Mar 17, 2015 at 12:36
  • 1
    If you want to "avoid risk as much as possible", you should certainly stay out of the stock market. Safe investments are deposits in banks up to the deposit protection limit for your country (Currently $250,000 in Australia) and government bonds from AAA-rated countries that issue their own currencies (there are only seven, but Australia is one of them).
    – Mike Scott
    Mar 17, 2015 at 14:03
  • @RileyH: In general, longer-term investments allow for more risk, since you have time to wait out any wild market swings.
    – BrenBarn
    Mar 17, 2015 at 16:37

It sounds like you are interested in investing in the stock market but you don't want to take too much risk. Investing in an Index EFT will provide some diversification and can be less risky than investing in individual stocks, however with potentially lower returns.

If you want to invest your money, the first thing you should do is learn about managing your risk. You are still young and you should spend your time now to increase your education and knowledge. There are plenty of good books to start with, and you should prepare an investment plan which incorporates a risk management strategy. $1000 is a little low to start investing in the stock market, so whilst you are building your education and preparing your plan, you can continue building up more funds for when you are ready to start investing.

Place your funds in an high interest savings account for now, and whilst you are learning you can practice your strategies using virtual accounts. In fact the ASX has a share market game which is held 2 or 3 times per year. The ASX website also has some good learning materials for novices and they hold regular seminars. It is another good source for improving your education in the subject.

Remember, first get educated, then plan and practice, and then invest.

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