How To Buy Shares In Australia In 2023

In this share investing guide, we'll dive into the ins and outs of how to Buy shares in Australia today. Note that we have broken the answer to this question into three key parts. First, we address the actual share investing process. The second addresses the best places to buy shares in Australia, while the last regards the best shares to buy right now.

 

Your capital is at risk. Other fees apply.

The following comprehensive share investing guide will address these topics in detail. It will also teach you what to look for when looking for the best brokers in Australia and how to identify the best shares to buy in 2023. We will even tell you if incomes from share investing constitute taxable income.

Where To Buy Shares In Australia – Best Regulated Stock Brokers Reviewed

Now that you understand the share-buying process, we now need to learn where to apply the process. Below, we introduce you to what we and the majority of analysts, as well as share investors, consider the best share brokers in Australia.

1. eToro – Overall Best Stock Broker in Australia

eToro is arguably the most popular share broker in Australia and the best place to buy shares among both beginners and experts. It has achieved this by providing the share investing community with a trading platform that isn’t just easy to use but also rigged with premium trading, research, and risk management tools. It also appeals to both investors and traders by allowing for the purchase of actual shares and the trading of share CFDs.

To start investing in shares via eToro Australia, you only need to create a trader account and deposit a minimum of $50. This exposes you to 2500+ local and international shares. And since the broker supports fractional share trading, you can begin investing in any of the listed shares with as little as $10. These trades are commission free. You, therefore, will only have to part with a competitive spread. 

eToro also tops our list of best share brokers in Australia because of its social and copy trading tools. Social trading lets beginner and expert investors interact freely, share ideas, and even collaborate on creating/testing strategies.

Copy trading, on the other hand, lets everyone earn passively. Beginners earn by copying trading strategies of highly successful share investors, while popular investors receive a commission from eToro based on assets under copy.

Your capital is at risk. Other fees apply.

2. Plus 500 – Most Beginner Friendly Stock Broker in Australia

Plus 500 is equally popular among Australian share investors because of its beginner-friendliness. The brokerage not only maintains a quick and straightforward onboarding process but also runs one of the most navigable and intuitive trader interfaces. Both the Plus 500 website and trading platforms also integrate a wide range of educational content and guides. Plus, it gives users a free demo account.

Note that Plus 500 is a pure CFD broker, and to get started, you will need to deposit at least $200. The upside to this is that the broker supports fractional share trading – with the minimum trade limit set at $1 – which creates room for diversification even with small balances. Additionally, it supports margin trading with leverages of up to 1:5.

Other factors that make Plus 500 one of the best places to buy shares in Australia include the fact that it is a commission-free trading platform. Share CFD traders will, therefore, only pay a competitive spread. Additionally, it supports a diverse range of deposit/withdrawal options and doesn’t charge payment processing fees. Additionally, its trading platforms (both web and mobile app) integrate a host of premium trading tools.

Your capital is at risk. Other fees apply.

3. CMC Markets – Access the Widest Range of Local and International Shares

CMC Markets is a hybrid share trading platform, allowing you to buy and own actual shares or simply trade leveraged share CFDs. Both trades are commission-free, and CFD traders have access to leverage of up to 1:5. Note, however, that this zero-commission trade deal only applies to your first share trade of the day – of up to $1000.

We rank it this high on our list of the best share brokers in Australia because it gives you access to the widest range of local and international shares – 35,000+. It also doesn’t maintain a minimum initial deposit limit. The minimum share purchase is, however, set at $500 when buying shares for Australian companies and $1000 for international shares.

Some of CMC Markets’ other core strengths that help it stand out include its user-friendliness and the fact that it is a multi-platform broker – available on the app and web. It also supports the universal MT4 trading platform, which comes in handy for CFD traders looking to copy trading strategies or automate their trades. But even more importantly, CMC Markets is regulated by ASIC and maintains a highly responsive customer support team.

Your capital is at risk. Other fees apply.

4. Saxo Markets – Best Share Broker Australia for the Most Innovative Trading Platform

Saxo Markets makes it to our list of the best platform to buy shares in Australia because it exposes its platform users to 22000+ stocks in Australia and 50+ international markets. It also makes it here because it maintains attractively low commissions on share trades. Buying Australian shares on Saxo Markets’ classic account, for instance, attracts a commission of 0.8% (minimum 8 AUD). Commission for international stocks, on the other hand, ranges between 0.30% to 0.10%.

 

But it also makes it here because of its innovative and highly intuitive trading platforms – designed with both beginner and expert share investors in mind. Saxo Investor and SaxoTraderGo, for instance, appeal to beginners because it is easily navigable and features a lot of educational content and guides.

SaxoTraderPRO, on the other hand, is a professional-grade investing platform. It integrates the widest range of advanced trading and risk management tools and is dedicated to professional share investors and active traders.

Your capital is at risk. Other fees apply.

5. Interactive Brokers – Best Share Broker Australia for Fractional Share Ownership

Interactive Brokers is a massively popular multi-asset trading platform, giving users access to thousands of shares from both local and international markets. It also operates a wide range of comprehensive trading platforms, comprising two desktop traders and three mobile trading apps. The most revolutionary yet are their IBKR PRO and IBKR Lite platforms that offer such advanced functionalities as order routing.

The share broker supports fractional share ownership. But even though the broker doesn’t have a minimum deposit limit, you will need at least $5 to start buying shares on its platform. Additionally, Interactive Brokers doesn’t have a minimum initial deposit limit and maintains some of the most competitive stock trading fees.

The commission on share trading for US stocks is based on your 30-day trading volume and ranges between 0.08% and 0.015%. Commission for European shares starts from 0.05% to 0.015%, depending on your monthly trade volumes. And US stocks attract a brokerage commission of between $0.0035 and $0.0005 per trade, based on your 30-day trade volumes.

Your capital is at risk. Other fees apply.

Factors To Consider When Searching For The Best Stock Brokers In Australia

We have discussed the five best share brokerage platforms in Australia. But there currently are hundreds of regulated share trading platforms operating in Australia. How, then, do you find the one that works best for you?

In this section, we tell you about some of the factors that you need ought to consider when vetting share brokers in Australia:

1. Cost of trading

The cost of trading has a direct impact on the profitability of your share trades. It, therefore, is imperative that your broker maintains highly competitive trading and non-trading fees.

2. Regulation and reputation

It is important that you only register an investor account with a regulated broker. They should have a reputation for reliability, efficiency, and great customer support. Confirm some of these factors from review sites and from both current and past brokerage users.

3. Number of shares

You will also want to confirm the number and diversity of the shares listed by the share broker. Go for a broker that offers a mix of local and international stocks from multiple markets.

4. Deposit and trade limits

You also need to confirm the broker’s minimum deposit and trade limits. In most cases, this will tell you if they support fractional share ownership. Brokers with low deposit and trade limits will most likely support fractional trading and vice versa.

5. Nature of investment

Before registering a share investor account with a broker, decide if you want to invest long-term or trade share CFDs. Then look for a broker that offers your preferred instrument.

The Basics Of Buying Shares In Australia

There are a few things that you need to know about share investing in general.

By investing in stocks, you are essentially buying a stake in the company distributing these shares. This is to say that if company X had 1000,000 shares in circulation and you bought 10,000 of these, you practically acquire 1% ownership of that company.

There are two primary ways of making money when share investing in Australia. For starters, you make money if you sell shares at a higher price than you originally bought them. The profit earned here is commonly referred to as capital gains.

You also make money from dividend distributions. If the company whose shares you own makes a profit in a year, some of it I distributed to its owners, i.e., the shareholders. Depending on the company, these distributions are made quarterly, semi-annually, or annually. How much you from dividend income is determined by the dividend per share issued and the number of shares owned.

Best Shares To Watch And Buy In Australia In 2023

In our quest to exhaustively answer the question of how to buy shares in Australia in 2023, we have addressed the share investing process and where to buy shares. In this last part of this answer, we tell you about the best shares to buy now in Australia.

Here are the five shares that our analysts believe every share investor ought to add to their watchlist:

1. Rio Tinto (RIO)

Rio Tinto is one of the oldest, largest, and most valuable mining companies in Australia and the world. We consider its shares a must-buy in 2023 because of three key factors. For starters, RIO share prices have performed exemplarily in the past and proved the company’s resilience by maintaining an overall uptrending price action. In the last five years, for instance, they have rallied 46%, with more than 9% of this having been gained in the last 12 months.

Secondly, we consider RIO a must-buy because of the company’s solid financials. In the last quarter of the 2021 financial year, Rio Tinto’s posted a 20% gain in year-on-year revenues and a 36% rise in net income. It also has a P/E ratio of 6.5X, which could mean an undervalued stock and a healthy debt-to-income ratio.

Lastly, we consider it a must-buy because we expect it to keep growing its revenues and survive the current economic crisis. These are all expected to increase the dividend yield for RIO shares and boost their value.

Your capital is at risk. Other fees apply.

2. Apple (AAPL)

Apple is the most valuable company in the world by market cap – at $2.36 Trillion. It is also one of the most lucrative stocks of all time, currently selling 105,000%+ above its IPO price. This is a testament to its resilience – seeing that it has survived multiple economic meltdowns along the way – and innovativeness.

Though Apple shares have shed close to 20% of their value in the year to date, they are still up by close to 250% in the last five years. The company also holds significant cash reserves, enough to see it through the looming economic recession unscathed.

There is a lot of optimism about the technology giant’s future, informed by more than the launch of newer and more technologically advanced iPhones. Apple TV+, iCloud, and its breakthrough M1&2 chip technology for its Mac Laptops are also expected to continue driving up its revenues. These all are the reasons why we consider AAPL one of the best shares to buy and hold today.

Your capital is at risk. Other fees apply.

3. BHP Group (BHP)

You should also consider investing in BHP Group shares in 2023 if you are looking for regular passive income – in the form of dividends – and above-market average capital growth. Note that BHP Group pays regular dividends – currently distributing yields at a rate of 11%.

Shares for the renowned mining company have also been on a sustained uptrend since their listing. In the last five years, for instance, they have rallied more than 60%, with close to 15% of this having been accrued in the last 12 months. Moving forward, BHP Group shares are expected to sustain this uptrend, which makes the brand attractive to long-term investors.

Your capital is at risk. Other fees apply.

4. Tesla (TSLA)

Tesla by Elon Musk is one of the fastest-growing companies in the world. In the last five years, for example, TSLA shares have rallied by more than 800%, helping the electric car manufacturer rise to a trillion-dollar company – albeit temporarily in the last quarter of 2021. In the year to date, Tesla shares have lost more than 54% of their peak 2021 values.

But the technology company has already proved its resilience. Even with the plummeting share prices, there still is a lot of investor confidence in both the brand and its manager – Elon Musk. The majority of share investors and traders are especially confident that Tesla shares will rebound soon and rally past their current all-time high. This informs our decision to feature it among the best shares to buy now in Australia.

Your capital is at risk. Other fees apply.

5. Pilbara Minerals (PLS)

Pilbara Minerals is a comparatively new and one of the fastest-growing mining companies in Australia. It has been around since 2005, went public in 2007, and PLS shares have gone parabolic since – rallying by more than 3300% since. In the last five years, Pilbara Minerals shares have rallied by more than 360%, with as much as 78% of this having been gained in the last 12 months.

Moving forward, PLS shares are expected to sustain this uptrend not just because of the company’s proven resilience. We expect to sustain this unparalleled growth because it is involved in the mining of such metals as Lithium, which is expected to shape the new age of green energy. We, therefore, recommend adding it to your watchlist for the best shares to buy in Australia now.

Your capital is at risk. Other fees apply.

How To Find The Best Shares To Buy In Australia

In addition to the five shares we have discussed above, there are thousands of equally resilient and massively promising shares out there. How, then, do you find the best share to invest in today?

Here are five pointers that you can use to identify shares worth buying today:

Follow the news

By following financial and business news, you learn which industries are performing well or are projected to perform well in the future. This narrows your search for the best stock for a few industries or companies.

Listen to experts

There are numerous reliable websites, blogs, and pro investors online dedicated to teaching you how to invest in shares. Some will even walk you through market analysis, show you the best stocks to invest in, and tell you which to dump.

Invest in familiar industries

Start investing in industries that you are familiar with. This makes analysis easier as you can quickly tell how different happenings within this niche will affect share prices and cash in this information.

Follow political and economic events:

Global politics and economic relations also play a significant role in shaping the share market performance. The Russia-Ukraine war and subsequent slowing down of oil production, for instance, have sent oil and gas company shares skyrocketing.

Are Shares Taxed In Australia?

Yes, share investing is taxable economic activity in Australia.

You will, however, only pay a capital gains tax on the income derived from your share income. Note that you also qualify for a capital gains tax discount of 50% if these assets were held for more than 12 months.

Here is an example: Assuming you just sold your shares and owed the government a capital gains tax worth $5000, you will pay the full amount if the shares were held for less than 12 months and half the amount ($2500) if these shares were held for more than a year.

Dividend yields are also subject to taxation. But they are subjected to the income tax rate alongside your annual income.

Here is another example: If a company whose shares you have invested in pays dividends worth $3000 in a year and your annual income is $67000 – you will be required to declare your income for that year as $70,000.

Conclusion – How To Buy Shares In Australia

There goes everything you need to learn about how to buy shares in 2023 in Australia. We started by breaking down the share investing process and followed up with where to buy shares by discussing the best stock brokers in Australia. Lastly, we talked about actual shares and told you about the top five shares to buy in Australia now.  

This guide also addressed such other factors as the basics of share investing. We even highlighted some of the factors that you need to consider when looking for the best share brokers in Australia. And even more importantly, it teaches you how to find the best shares to buy today and how shares are taxed in Australia.

Want to start investing in shares in Australia in 2023? Register an investor account with one of the best share brokers that we have discussed above, verify your identity, fund this account, and start buying/selling shares.

eToro – Buy Top Stocks With 0% Commission In Australia

Open an account with eToro, deposit some funds with USD, and finally – buy Shares from just $10.

Your capital is at risk. Other fees apply.