• Trustees Private Wealth

Mar 3, 2020

Investor basics

So you’re ready to start investing, but you don’t know where to begin? Often people believe that investing is only for the ‘super rich’ or for finance professionals. The truth is, investing doesn’t have to be difficult or expensive, with some patience and persistence, anyone can be successful and achieve their financial goals.

Set your goals

A goal can be anything from saving for a home deposit, an upcoming holiday or car, or even funding your child’s education. Knowing what you’re saving for and when its for, will drive how you invest to achieve those goals. When your money has purpose, it’s easier to stay on track and ensure you’ll achieve those goals. When setting your goal, it helps to be specific by having a value and timeframe. For instance, “I’m saving for a first home deposit of $50,000 by time I turn 30 or in 5 years time”.

Start now

There’s no reason why you can’t start today. The idea that you need to have vast sums of money or expansive knowledge of markets to be successful, while may have been true in the past, is far from true today. New Zealand alone has multiple investment platforms through which you can begin to invest. Perhaps the most well-known, Sharesies, allows you to invest for as little as $1. Most investment platforms can also help you set up a ‘regular investment plan’, whereby you contribute amounts of money at regular intervals. Regularly adding to your investments will greatly improve the results of compounding your portfolios value, even if it does mean sacrificing a couple coffees throughout the week.

Balancing risk and return

Everyone has different preferences towards risk, while some enjoy to gamble, others enjoy to save. Neither is necessarily better or worse than the other, but understanding your circumstances and tolerance to risk, will help to shape your portfolio.

Typically risk profiles will range from ‘defensive’ to ‘aggressive’ mixes of assets, where the latter range will progressively invest more into riskier assets such as shares and property, and away from cash and bonds. The greater the risk, the higher the reward. However, over the short-term higher risk investments tend to be more volatile. While given a longer term, will typically produce greater returns.

You can check out the quiz at sorted.org.nz to see what your appetite for risk is.


‘Don’t put all your eggs in one basket’. Perhaps whoever came up with this adage had investing in mind, given the impracticality of carrying multiple eggs in many baskets. The point however, being to spread your risk as wide as possible, so your portfolio is not affected by any single stock having a rough time. Diversification can be achieved by investing in many companies (shares), across countries and different asset classes.

For example, a Balanced KiwiSaver will be invested across cash, bonds, shares and listed property. Similarly, there are many managed funds (just like your KiwiSaver) in New Zealand where the fund manager has invested with reference to a risk profile and diversifies for you.

Educate yourself

While the best way of learning is always through doing, there are many resources available online. See some of the tools and guides available on sorted.org.nz, read some books and subscribe to our blog!

A watched pot never boils

The saying used to mean that time passes very slowly when waiting for something to happen. The same can be said for investing. Frequently checking your account will not mean you’ll reach your goals any sooner. While reviewing and monitoring your portfolio is important, it’s best to trust in the process and only make changes when needed. Remember different investments will suit different time horizons.


While all investments have different tax obligations, tax doesn’t have to be difficult. In New Zealand, we have PIE (portfolio investment entity) managed funds which take care of the tax for you. All you have to do is provide your prescribed investor rate.


Fees are to your portfolio what an anchor is to a boat. The greater the fees (or anchor) the less likely you’re to reach your financial goals (the horizon). What’s important is to make sure you’re comfortable with what you’re being charged. For KiwiSaver and managed funds, check out the sorted smart investor tool here smartinvestor.sorted.org.nz to see what the charges are. Check for any additional fees, and if there are performance fees, look to see that they’re fair.

Responsible investing

Investors are regularly starting to question and pressure corporates into incorporating social initiatives and consider their social responsibility. With climate change being at the forefront, such as through the introduction of emissions disclosures, responsible investing can mean divesting away from anything from tobacco products to weapons manufacturers.

Ask your provider how they incorporate social issues into their investment process to see if it matches your beliefs. Check out mindful money, a useful tool to see where your KiwiSaver money is invested.

Don’t be afraid to ask for help

Financial Advisers provide financial advice with your goals in mind. There are almost to 2000 FAs in NZ, while predominantly their expertise lies with investment advice and portfolio design, advisers can often provide advice with regard to insurance, estate planning, taxes, savings and your KiwiSaver.

To talk to one of our Financial Advisers call us on 0800 878 783, email [email protected] or visit our website www.trustees.co.nz


Note: This article is meant for informational purposes only and does not constitute personalised financial advice. If you have any questions, we recommend you consult with one of our Authorised Financial Advisers. A disclosure statement is available upon request and free of charge. 

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