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The share market explained: Four investing concepts every beginner should know

Investing can feel like a conversation in a language you haven’t quite mastered. We ask CommSec share market experts to explain four core investing pillars and why they warrant understanding.

By Brooke Le Poer Trench

  • Understand four key investing concepts: ETFs, market sectors, IPOs and commodities.
  • Learn how diversification, market trends and economic activity can influence investment performance.
  • Explore some of the factors that help shape share market movements and investor behaviour.

ETF investing with Laura Besarati

The basket approach to owning Australia’s 200 biggest companies.

What is an index and what does it represent on the nightly news?

It’s a way of tracking the performance of a group of companies. For example, the ASX 200 measures how Australia’s 200 largest listed companies are performing. When you hear it in the news, it’s often used as a snapshot of how the broader share market is moving.

Why might a beginner consider this instead of picking individual brands they love?

Investing in an exchange-traded fund (ETF) that tracks an index offers exposure to a broad range of companies in a single investment. It can help simplify decision-making, though it’s still important to understand how the ETF works and what it tracks.

How could this reduce my risk?

In one word: diversification. By spreading your investment across many companies and sectors, it reduces the impact of any single company performing poorly – so you’re not putting all your eggs in one basket.

Sector trends with Steven Daghlian

How to spot where the economy is moving and align your portfolio with the future.

The market is divided into 11 sectors. Why should we care about these buckets?

Sectors can help investors understand what’s driving the market and are important when aiming for diversification. Different markets are dominated by different sectors. For example, the banks and miners make up roughly half of the Australian market.

How does this compare to markets overseas?

The US is dominated by tech giants, like NVIDIA and Microsoft; Germany has a strong manufacturing base; while the UK leans towards financials. Meanwhile, South Korea’s share market has more than doubled over the past year, driven by demand for AI memory chips produced by companies like Samsung. Understanding these differences can help investors build a broader and more balanced portfolio.

Is there a danger in following trends?

Chasing a trend could leave a portfolio heavily tilted towards a single sector, theme or market. That can work well for a period – but trends change!

IPO Spotlights with Gillian Bowen

What happens when a company goes public and how to look past the hype.

Why is an IPO such a big deal for investors?

An initial public offering, or IPO, is when a company lists on the share market for the first time – giving investors a chance to buy in. There’s often hype around these moments. Some companies naturally generate buzz – but it’s worth realising that excitement doesn’t always equal strong business fundamentals. By going public, companies raise capital for growth or to reduce debt, while early investors and founders can cash out some of their stake.

Why should investors pay attention to IPOs beyond finding the “next big thing”?

IPOs can often signal broader market themes. Even if you don’t invest, taking a moment to notice them can provide insight into valuations, investor sentiment, and what’s happening across different sectors.

What are the key risks to look for?

I’m a storyteller by nature so I’m curious. If the story feels stronger than the numbers, that’s a red flag. Investing carries risk – so take the time to assess the information and consider professional advice if needed.

Commodities 101 with James Gruber

Understanding the raw materials – from gold to lithium – that power our economy.

Australia is a resources-heavy economy. Why is it vital for us to understand commodities?

It matters because they underpin everyday life – from food and fuel to housing and technology. Their prices influence geopolitics, inflation and economic stability. Commodities are especially relevant for our share market as resources represent more than 30 per cent of the ASX 200.

With the shift toward green energy, what are the “new essentials”?

Oil and coal used to power our economy. Now, commodities powering the green revolution are coming to the fore, including lithium, copper and nickel for batteries and electrification, and rare earths for EV motors. Many producers of these commodities are listed in Australia.

What’s one of the safest ways for a beginner to get started?

Commodities can be volatile so ETFs could offer a simple way to invest in them, providing some exposure to the broader resources sector.

The CommSec Market Update podcast is released twice daily at 7.00am and 5.00pm. Simply search for CommSec in your preferred podcast app.

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Published: 10 August 2026

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An earlier version of this article was published in Brighter magazine. 

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