If you're like me, you may have made a New Year's resolution about building up your ASX share portfolio in 2025.
Now with a $200,000 goal in mind, you're unlikely to get there in just one year. Not if you're starting with a small amount of investment savings in January.
But that's okay. We're not talking about a high-risk trip to the casino here.
Below we look at three easy steps every Aussie investor can take to start growing their ASX share portfolio in 2025.
Start with some diversity in your ASX share portfolio
If you're starting off small, I suggest considering initially building your ASX share portfolio by investing in a few broad index funds.
The Vanguard Australian Shares Index ETF (ASX: VAS), as one example, offers exposure to the top 300 Aussie companies listed on the S&P/ASX 300 Index (ASX: XKO).
Not surprisingly, the top three holdings of this exchange-traded fund (ETF) correspond to the three biggest companies on the ASX by market cap. Namely BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA) and CSL Ltd (ASX: CSL).
Management fees run at a low 0.07% a year.
Over the past 12 months, the ETF has gained 10.5%, which is significantly higher than its longer-term average.
With an optimistic eye on the outlook for ASX shares, we might aim for 7% returns from a benchmark tracking fund.
Start saving
There's no way around it.
Money doesn't grow on trees. So, to build up a small ASX share portfolio to $200,000 you'll need to start diligently setting aside some investment money every month.
Everyone will have different incomes and expenses. But if you can put $800 a month into ASX stocks, you'll be well on your way to your goal.
Move onto promising individual stocks
Once you've got a foothold with a few broad-based ETFs, you may want to begin hunting for promising individual companies that could help turbo-charge the returns of your ASX share portfolio.
You won't always get these right, but even a few big outperformers can make a sizeable difference to your annual returns.
As legendary investor Warren Buffett said, "The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders."
In 2024, for example, Qantas Airways Ltd (ASX: QAN) shares gained 67%.
And an investment in Zip Co Ltd (ASX: ZIP) shares in 2024 would have made up for several losing stocks (or 'weeds' as Buffett might call them), with the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock soaring 353% over the year.
With a mix of ETF investments and individual ASX stocks, I believe a longer-term annual return of 9.0% is achievable.
A $200,000 ASX share portfolio in 12 years?
As I said up top, if you're starting with a small stake, you're highly unlikely to grow your ASX share portfolio to $200,000 in 2025 alone.
But if you can invest $800 a month into the market, at 9% annual returns, starting now you should hit your goal of $200,000 in about 12 years.
