Back
Page last updated: 07 March 2023

Investing basics

We all invest for the same reason – to grow our money. The way we approach investing can be quite different based on our investment goals and attitude to risk.

In this section we help you work out what kind of investor you are and give you some tips on how to manage your investments confidently.

Investing basics with the FMA

First things first

Top tips to keep in mind when you're starting out with investing or looking into a new type of investment.

Whether you are investing by yourself on an online investment platform or using a financial advisor - make sure that you're dealing with a licensed provider. Being licensed means they are authorised by the FMA and are adhering to a specific code like treating clients fairly and with integrity. See more about getting financial advice.

The FMA regularly publishes investor warnings, with the names of investment companies and websites you should be wary of. It doesn’t contain all potential problem investments - just the ones we have been made aware of. 

See the list of warnings and alerts 

The FMA also publishes the names of unregistered businesses that have been reported as offering financial services to New Zealanders. Investing with them means you have little protection in the event something goes wrong. 

See the list of unregistered businesses

Research a product well before investing (aka. do your homework). There are many types of investments available. Here are some key things to remember when doing your research:

  • Think about the impact of fees before choosing an investment. If you can't work out how fees are charged, ask them plenty of questions and don't hand over money until you're satisfied.
  • Information about the share market and investing in shares can get quite technical. See our guide to understanding share market jargon.
  • Don't go chasing high returns - past performance is not an indicator of future performance. Investments go up and down in value. 
  • Understand your appetite for risk, and how much you can afford to lose if things go wrong.

Plan and invest based on your future needs and goals. If your goal is shorter-term, you might want to think about lower-risk investments with lower volatility. 

For help setting your investment goals and more information on the basics, please visit the Sorted website.

If markets go down, stay calm. Share markets rise and fall, which is a normal part of investing.  History shows us that markets can and do come back – but it might take time.   

If you’ve planned well and you’re keeping an eye on your individual investments you should still be on track to meet your goals in the longer term.

It is normal to be nervous if a market downturn affects your investment balance – in fact, human brains are hard-wired to fear losses. Talking to a financial adviser or your product provider might help you avoid making a decision that will crystallise (lock-in) a loss.

A quick guide for anyone who’s thinking about or already dabbling in investing – and wants to know more, written by Mary Holm, an award-winning financial columnist and author. Mary sets the record straight on eight common myths about investing.

Mary Holm’s introductory guide to investing

  

Look out for scammers

  • Avoid "get rich quick" and "can't lose" schemes. If it sounds too good to be true, it probably is. 
  • Avoid unsolicited offers. It is illegal to sell financial products through a cold call or other unsolicited communications in New Zealand. 
  • The FMA only regulates financial services operating in New Zealand, so if you are looking at investing internationally, remember that it is often impossible to recover your money if an overseas investment turns out to be a scam.
  • Don't rely on word of mouth or friends’ recommendations — go back to basics and do your own research. 

Learn how to look out for Scams

Invest with confidence

This video is for anyone who’s interested in dipping their toes into investing, we run through some of the basics including what you can invest in, risk and how to invest wisely, and who can help you.

Get the guides

Shares guide

When you buy shares, you're buying a small part of a company. Share this! is a comprehensive guide for investors on the nuts and bolts of choosing, buying, owning and selling shares

Managed funds guide

We've created a comprehensive guide to choosing, buying and monitoring managed funds. Before you invest, make sure you study the guide. 

Bonds guide

Bonds generally offer more stable returns and lower risks than investments such as property or shares. Read about the pro's and con's in Bond Voyage, our guide to bonds.