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Demystifying Share Investing: A Guide for Kiwi Investors

The New Zealand share market offers exciting possibilities for building wealth and achieving financial goals. However, for many Kiwis, it can be uncharted territory. This guide unpacks the fundamentals of share investing in Aotearoa:

Understanding the Basics:

  • What are shares? Owning shares means owning a portion of a company. When the company performs well, the value of your shares may increase, potentially leading to capital gains. You may also receive dividends, a portion of the company's profits.

  • Different investment options: You can invest in individual company shares or choose diversified options like Exchange-Traded Funds (ETFs) that track a basket of assets like indices.

Getting Started:

  • Open a brokerage account: Choose a reputable online brokerage platform offering access to the New Zealand and potentially international markets.

  • Do your research: Analyze companies you're interested in, considering factors like financial performance, future growth potential, and industry trends. Utilize resources like annual reports, news articles, and financial analysis tools.

Investing Strategies:

  • Dollar-cost averaging: Invest a fixed amount regularly, regardless of share price fluctuations, aiming to average out the cost per share over time.

  • Long-term approach: Share investing is generally a long-term game. Patience and staying invested during market ups and downs are crucial.

  • Diversification: Spread your investments across different companies and sectors to mitigate risk. Consider including ETFs in your portfolio for broader diversification.

Costs and Fees:

  • Brokerage fees: Platforms typically charge fees for buying and selling shares. Compare fees between different platforms before choosing one.

  • Custodian fees: Some platforms charge fees for holding your investments. Be mindful of these additional costs.

Additional Considerations:

  • Risk tolerance: Be honest about your risk appetite and choose investments that align with your comfort level.

  • Financial goals: Clearly define your investment goals, whether it's building long-term wealth, generating income, or achieving a specific target.

  • Seek professional advice: Consider consulting a financial advisor for personalized guidance tailored to your circumstances.

Kiwi-Specific Resources:

  • The New Zealand Exchange (NZX): Provides information about listed companies, market news, and educational resources: https://www.nzx.com/

  • The Financial Markets Authority (FMA): Offers investor education and resources to help Kiwis make informed investment decisions: https://www.fma.govt.nz/

  • Independent Financial Advisors: Can provide personalized advice and guidance based on your individual circumstances.

Remember: Share investing involves inherent risks. The value of your investments can go down as well as up, and you may lose money. Always conduct your own research, consider seeking professional advice, and never invest money you can't afford to lose. By taking a well-informed and long-term approach, Kiwis can navigate the exciting opportunities and potential rewards of investing in the New Zealand share market.