Page last updated: 02 September 2022

The 5 D’s of DIY investing

5 D's of investing

Recent research by the FMA into online investing platforms found 31% of all online DIY investors jumped into an investment because they didn’t want to miss out. Additionally, 27% said they invested based on a recommendation from someone they know without doing their own research.

If you’ve got investing FOMO, first consider the Five D’s of DIY investing:

Investing is a great way to build your wealth over time, but before you jump in, it’s important you understand how investments work and whether the shares you’re thinking of buying are a good investment for you. These are the types of questions you should ask yourself when you’re doing your due diligence, or research. 

Do your due diligence or research

Investing a certain amount at regular intervals (for example automatically every pay day) saves you having to try to pick when it’s a good time to buy. This is how KiwiSaver works and you can do the same with other managed funds or on online investing platforms.

Drip feed your investments

Diversification might sound complicated, but it’s really just a fancy way of describing having a mix of different types of investments. This protects you from a single investment going wrong and causing you to lose a significant percentage (or even all!) of your money. But there are right ways and wrong ways to diversify.

Guide to diversifying

If you’ve ever opened your investing app to a sea of red down arrows and felt a surge of panic, you’re not alone. Having an emotional reaction and a desire to do something - anything - to stop the fall is actually hard-wired into our brains as humans.

It’s called loss aversion, and behavioural scientists have run experiments showing we’re almost twice as likely to fear losses as we are to enjoy gains.

Don’t freak out if markets go down

If you want to invest, get a mortgage or insurance, or plan for your long-term future, you may benefit from getting financial advice. Those providing financial advice are required to be licensed by the FMA as a Financial Advice Provider or operate under a Financial Service Provider licence issued by the FMA.

Getting advice

Key areas for investors

Basics of investing

Learn the investing basics to help you make the most informed decisions on your journey as an investor.

Investing basics

Online investing 

We explore into the ins and outs of online investing platforms and understand the risks of using them.

Online investing

Already investing?

Everything you need to know about managing and maintaining your hard-earned investment.

Management tips