Investing in shares can seem daunting at first. However, it doesn’t need to be. With a little know-how and the right resources, you can make informed decisions about what shares might be right for you.
This guide will walk you through a way you can approach buying and selling shares and some of the things to think about on the way.
Deciding whether share trading is right for you starts with understanding what’s important to you. If you know what you want to achieve, it can make choosing which shares to consider easier. So begin by asking these five questions:
Are you looking to grow your wealth over time, create an income for today, or make some short term gains? If you want to do a bit of everything, what would be the right balance for you?
Understanding your goals will influence what shares you might invest in. It could also guide which strategies you use, such as buy and hold.
Are you saving for a child’s education or looking towards your retirement? What’s happening in your life can help shape what shares you might buy, and when you might sell them.
How long do you plan to invest for? Shares are generally better suited for investing over the long-term. However, some investors have a shorter timeframe and may choose to actively monitor the market and trade often, in hope of a short-term gain.
All investments carry risk. When investing in shares, you may need to accept more risk than some other options like a term investment, but you may be able to access greater returns as well. Taking on risk means you’ll need to be prepared for a profit or loss. You can get a better idea of your risk appetite by working out your investor profile.
If you feel you need advice, you can always talk to an Authorised Financial Adviser. They will work with you to understand what you are hoping to achieve, and provide advice on the right investments for you. You may also wish to seek advice from legal or tax specialists about the best way to organise your investments.
With your goals set and your research done, you’re ready to prepare your share investment strategy.
Mapping out your investment strategy, and writing it down, can help you stay focused and guide your decisions. Some things you might want to define include:
Having a written strategy will help review your investments. This is something you’ll want to do regularly to ensure it reflects your current approach to investing.
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ASB Securities Limited is an NZX firm. When you trade on the NZX markets through ASB Securities you must comply with NZX rules as outlined in the ASB Securities Trading Conduct for Online Share trading. ASB Securities terms and conditions apply. Pricing data supplied by ASX and/or NZX. ASB Cash Management Account, ASB Foreign Currency Account, ASB Margin Lending and ASB Term Deposits are provided by ASB Bank Limited. ASB term's apply. Rates and fees may change. Refer to asb.co.nz for other fees and charges. This page does not have regard to the financial situation or needs of any reader. As individual circumstances differ, you should seek appropriate professional advice. See the ASB Securities glossary for share trading and investment terms or Morningstar for research terms.