A couple of times in the last week, I’ve received a similar query: 

“How can I get started investing with $500 or $1,000?”

It’s a simple question.

And, if you’ve been investing for a while, you might have a good answer.

But if you’d never had a brokerage account, much less invested, and the whole thing seemed entirely foreign… 

Well, then it can feel like a question without a simple answer.

But we’ll get to that.

Because the most recent time I received that question was in reply to a tweet of mine.

I tweeted:

Investing is 95%:

Working hard.

Saving hard.

Buying well.

Leaving the hell alone.

…

That's it.#ausbiz #ausinvest #investing

— Scott Phillips (@TMFScottP) November 12, 2021

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So I thought we’d start there.

See, the team and I at The Motley Fool spend almost all of our time on the third one.

And I think we do it pretty well. Past performance is no guarantee, of course, but I work with smart, capable, committed people who want to help our members achieve their financial goals.

But you can do pretty well with just 1, 2 and 4.

No, that’s not sacrilege for a guy whose day job is picking stocks.

And no, I’m not going to get fired for saying so.

My point is that I think we can help you with the third bit, but you have to help us, help you.

You’ve gotta work and save hard. You’ve gotta leave things alone (though we’ll help you with that, too, with our regular advice).

But we can’t do any of those things for you.

You have to do that work, yourself.

Now, in terms of where to start, I reckon there are two really good options.

The first is to kick off with some instant diversification through a low-cost index-based exchange-traded fund (ETF).

Vanguard is excellent and has a low-cost fund that tracks the ASX 300: Vanguard Australian Shares Index EFT (ASX: VAS). Also one that tracks the rest of the developed world: Vanguard MSCI Index International Shares ETF (ASX: VGS). I own units in the latter, for full disclosure.

Other ETF providers have similar options.

Buying some of each gives you immediate diversification and global reach. Simples, as the meerkat says.

The second option is to go with individual company shares. If you’re taking that option, try to get to 15-20 companies as quickly as possible.

That has the dual benefit of ensuring one company’s share price movements don’t unduly impact your portfolio value and also is less likely to impact your emotional state. A meaningful loss, early on, can otherwise play with your mind, potentially derailing your long term wealth-building.

And then, of course, you can keep going, with either strategy or cross-pollinate them — adding individual companies to your ETFs, or some international ETFs (for example) to your ASX companies portfolio.

And then?

Yep, leave it the hell alone.

Not entirely, of course.

There may be times when selling is prudent.

That’s why I said ‘Investing is 95%…’ not ‘Investing is 100%…’ 

But for most of us…

Most of the time…

I reckon the working, saving and adding bit will drive most of the value of your long-term wealth building.

Or, as I said in another tweet:

To a man with a hammer, every problem looks like a nail.

But a man with too many tools easily becomes overwhelmed and tries to solve the 'nail' problem using a computer program and new percussion technology.

A man with a nail should just use the hammer.#ausbiz #investing

— Scott Phillips (@TMFScottP) November 11, 2021

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Sure, you can make investing more complex if you try.

But sometimes you’re better off just keeping it simple… surely?

(See what I did there? And don’t call me Shirley.)

Have a great weekend.

Fool on!

The post 95% of investing in 4 simple steps appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ETFs for ASX investors in November
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) off to such a great start in November?
• Why has the ETFS Semiconductor ETF (ASX:SEMI) leapt 14% in a month?
• 3 high quality ETFs getting ASX investors excited
• Here’s why Vanguard MSCI Index International Shares ETF (ASX:VGS) could be a top passive investment idea

Motley Fool contributor Scott Phillips owns shares of Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Insurance Australia Group Ltd (ASX: IAG) share price has suffered a sharp fall over the past month. This is nothing new, however. Its shares have been on a rollercoaster ride since COVID-19 arrived on the world stage.

At the end of today’s market session, the insurance giant’s shares finished down 0.22% to $4.45 apiece. This means that the IAG share price has fallen by more than 16% since this time last month.

How has IAG performed recently?

The IAG share price has continued to decline since its most recent trading update in early November.

The company told investors it was expecting a rise in net natural perils claim costs for FY22. Severe storm and hail activity experienced in South Australia and Victoria during October were the cause.

In total, net natural perils claim costs for the current financial is forecasted to be around $1,045 million. This is a significant increase from the company’s previous estimates of $765 million.

IAG was forced to downgrade its FY22 insurance margin guidance range between 10% to 12%. Originally, the insurance margin level was in the 13.5% to 15.5% range. Lower vehicle claims made by customers were partly offset by inflationary pressure on claims costs in the company’s motor and home portfolios.

Pleasingly, gross written premium (GWP) improved in the first quarter of FY22, lifting in the mid-single-digit range.

While still trying to navigate its way through the tough trading conditions, IAG was recently hit with civil penalty proceedings.

The Australian Securities and Investments Commission (ASIC) took the embattled insurance company to the Federal Court of Australia over IAG’s failure to pass on the full discounts to a large number of NRMA customers. This relates to policyholders to took up NRMA Home, Motor, Caravan and Boat Insurance between March 2014 and September 2019.

IAG did self-report the issue to ASIC when it conducted a review in 2019 and has since embarked on a remediation program.

About the IAG share price

It’s been a rollercoaster ride for IAG shares, having moved unpredictably over the past 12 months. Its shares are currently down 15% since this time last year, and down 5% in 2021.

Based on valuation metrics, IAG has a market capitalisation of around $11.02 billion, with approximately 2.47 billion shares on issue.

The post Here’s why the IAG (ASX:IAG) share price is down 16% in a month appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Kogan.com Ltd (ASX: KGN) have had a rough start to November so far. The eCommerce company has been plagued with concerns of ongoing inventory mismanagement since the latter part of 2020. As a consequence, the former darling has become a popular company to short.

The Kogan share price lacked direction in the context of today’s session. After the closing bell, shares were at $9.14, up 0.22%.

A cyclical company currently out of fashion

It doesn’t take a rocket scientist to work out it hasn’t been a good time for Kogan shares over the last 12 months.

A backlog of inventory equating to increased warehousing costs has taken its toll on the company’s earnings for the past three quarters. While the bottom-line dwindled, so too has the Kogan share price, falling 53% since this time a year ago.

Overall, the market seems divided over whether now is a good time to buy Kogan shares. Some analysts and fund managers think yes, others are not so keen.

For instance, Chris Stott from 1851 Capital joined Livewire back in September to share his argument for rating the eCommerce company a sell. At that point in time, Stott highlighted his belief that Kogan was still dealing with inventory issues. In addition, the fundie expected this issue to continue for a while longer.

It seems much of the market would agree to some extent. Kogan shares have featured prominently in the 10 most shorted ASX shares recently. In our latest 10 most shorted ASX shares, the Ruslan Kogan-led business found itself in second place with a short interest of 10.7%.

Despite this negative sentiment, the company posted gross sales and active customer growth in its recent first-quarter update for FY22. In the same update, Kogan revealed it had resolved previous inventory pressures.

However, short levels have remained elevated since this announcement, indicating that perhaps the market had anticipated better results.

Contrarian take on the Kogan share price

The sentiment seems heavily skewed towards the negative end of the spectrum for Kogan, which would make Credit Suisse’s outperform rating quite a contrarian perspective. Analysts at Credit Suisse believe the eCommerce company will continue to benefit from the online shopping shift.

As such, the broker has a $13.88 price target on the Kogan share price. This would suggest a potential upside of 51%.

The post Why are Kogan (ASX:KGN) shares being shorted in November? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Selfwealth Ltd (ASX: SWF) share price has dropped by 18% in the last month.

That’s despite the share brokerage company continuing to grow at a very quick pace.

Both FY21 and the first quarter of FY22 showed a high level of growth.

FY21 report

Whilst the FY21 result wasn’t within the last month, it may have featured in investors’ minds in recent months.

The last financial year saw revenue growth of 135% to $18.4 million, with a 105% increase in active traders. Operating cashflow was a positive $1.1 million in FY21, driven by “strong” revenue growth and disciplined cost control.

Selfwealth has been working on diversifying its revenue streams. US trading was launched in December 2020 and was adopted by 29% of total active traders within the first six months.

The company said it demonstrated its scalable business model in FY21, with increasing profitability. The gross profit margin increased from 33.4% in FY20 to 41.4% in FY21. Operating expenses increased by 41% compared to revenue growth of 135%.

Selfwealth’s mission is to increase its market share to be the number two in online trading. It said it was number four at the time. The company said it is the top platform for attracting people switching from banks and other platforms.

The Selfwealth share price has fallen by around 17.5% since the release of the FY21 result.

FY22 first quarter update

Just over a month ago, the business reported the first quarter of its FY22.

It has reported accelerating quarter on quarter growth. Active traders increased 13% to 107,461, quarterly trade volume grew 22% to 435,620 and client cash rose 15% to $600 million. The operating revenue rose by 7.8% quarter on quarter to $5.5 million and 32% year on year.

Selfwealth has been working on increasing engagement through content, with new development and investment webinars attended by thousands of customers every week.

It has also been working on adding value with production innovations like instant deposits, live pricing and integration of ESG data.

After a capital raising a few months ago, the business has been increasing its investment and it’s seeing the advantages of that, with expectations the company will keeping benefiting for the rest of the year and beyond.

Selfwealth experienced a cash outflow of $1.1 million for the quarter to 30 September 2021. It ended the quarter with $17.5 million of cash with no debt.

AGM

The latest market sensitive announcement that may have impacted the Selfwealth share price was the annual general meeting (AGM).

At the AGM, it outlined the business case for Selfwealth, its FY21 result and the FY22 first quarter numbers.

The company is also on track in the second quarter of FY22 for cryptocurrency and new international markets. It’s also looking to refresh its user interface and add more education and content for members.

In the third quarter it’s looking to launch ‘dynamic notifications’, tax reporting, provide a advisor platform update, community insights and the news feed 1.0.

Then, in the fourth quarter of FY22, it’s working on new products, news feed 2.0 and the dynamic trading feature.

Selfwealth says that it has high growth potential on a scalable platform with diversified revenue and significant operating leverage.

Selfwealth share price snapshot

Whilst Selfwealth shares may be down more than 50% over the last nine months, it has risen more than 70% over two years and 210% from the bottom of the COVID-19 crash.

The post Why has the Selfwealth (ASX:SWF) share price dumped 18% in a month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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