Looking to grow your net worth using Growth Stocks. Here are some of the easiest ways to invest in Growth Stocks in Australia.
What is a Growth Stock?
Simply put, a growth stock is a publicly traded company that is expected to grow more than the market. A good example in 2020 would be Tesla. Since the start of the year it has gained over 200%. This is obviously an outlier. But there are many other stocks that have grown even during the market downturn.
If you’re a young individual you probably don’t have a huge net worth. So your goal most likely is to grow your capital. Growth stocks are one way to achieve this.
Growth stocks tend not to pay dividends. This is because these companies usually invest their profits in order to grow and create a bigger business. So if you’re looking for dividend stocks – these aren’t for you.
Companies like Amazon, Apple, Tesla, Shopify, Uber etc are all considered growth stocks. These are companies that people are betting will be bigger in the future.
How to pick Growth Stocks?
Picking stocks on your own is a tricky business. Even if you think an idea is brilliant, it doesn’t mean it’s a good business. Personally I like to leave the stock picks to the experts and that’s why I’ve included options in this post where you don’t need to know anything about investing.
The easiest ways to invest in Growth Stocks
Here are my top picks for investing in growth stocks in Australia:
The Spaceship Voyager Universe portfolio is made up of companies that Spaceship thinks will be important in the future. There are a lot of tech companies in this portfolio – which makes sense. It’s a good way to invest in many of the companies that you already use like Apple, Netflix and Alphabet (google).
The great thing about Spaceship is it’s very easy to get started. All you need is $5. And you won’t pay any fees on the first $5000 you invest.
p.s – Grab a $5 bonus when you sign up to spaceship.
Raiz Aggressive Portfolio
Raiz is a micro-investing platform similar to Spaceship Voyager. They offer a number of different portfolios. The Aggressive Portfolio is probably the most “growth” friendly. It’s made up of ETFs which are in turn made up of growth stocks. The great thing about using Raiz is your money is invested across a wide range of assets.
Just like Spaceship, you can get started with as little as $5. Raiz charges a small monthly fee and you can invest as much or as little as you want for the same fee until your balance reaches $10k.
p.s – I compared the performance of Spaceship vs Raiz here.
eToro – Invest in U.S Stocks
If you plan on picking stocks on your own, then eToro is a good choice for investing in U.S stocks without having to pay any commissions. In Australia, most brokers charge a fortune to invest in stocks like Apple or Netflix. But on eToro you pay no commissions. This could end up savings you a lot.
eToro also lets you invest in partial stocks. So you don’t need to buy a full stock. This is great for companies like Alphabet who’s stocks are valued over $1k. You can invest with as little as $50.
Using eToro you could build a portfolio of Growth stocks as well as ETFs and even dabble in more risky assets such as crypto. I’ve done a full eToro review here with more details on how the platform works.
Stake – Invest in U.S Stocks
Like eToro you can invest in U.S stocks on Stake commission free. The main difference between the two platforms is on Stake you can invest smaller amounts in fractional shares. Stake makes money from the small FX fee they charge when you deposit AUD and it gets converted into USD. It’s an innovative business model, and one that could save Australians a lot of money. Once you’ve deposited funds, you can trade it as much as you like without having to pay any commissions.
Commsec Pocket lets you invest in various ETFs for just $2.50 per trade. This is much less than what commsec usually charges. The themed ETFs include “Tech Savvy” and “Sustainability Leaders”. While you don’t have a lot of choice, and your portfolio won’t be super diversified like on Raiz or Spaceship, it is a decent option for investing in ETFs.
Australians now have a number of great options for investing in growth stocks. These are the platforms that I’ve tried out. Let me know in the comments if you’ve tried any others.