Getting started with investing

Investing is all about trying to get your money working hard so you can do the things that matter most. If investing is something you've been thinking about but you're not sure where to begin, here's some information that may help to get you started.

Investing or saving?

What makes investing different from saving? While saving is a great way to get started, investing moves things up a gear. Instead of earning only interest through a savings account, investing in products like shares or property could give you a greater return or profit over the long term.

Setting yourself up to invest

Sound investment decisions begin with knowing where you are now and where you want to go, so it's a good idea to consider:

  • Your current financial situation
  • What you want to achieve from investing
  • When you want to achieve this by
  • How much risk you are willing to take with your money

Understanding investment risk and return

When it comes to investing, it's important to understand risk and return. Getting a good understanding of the relationship between them can help you to make more informed decisions - both at the time you invest and over your investment’s lifetime.

If the investment return over the short-term is fairly predictable, the investment is said to be lower risk. If the return has greater potential to go up and down over the short to medium-term, the investment is said to be of higher risk. An investment doesn't need to be ruled out based on risk, but you should consider if that risk can be reduced or managed.

Tips for managing investment risk and return

Risk in investments can't be entirely eliminated – but there are a few things you can do to limit it:

  • Know what you're investing in.
  • Understand that some investments will go up and down in value over time.
  • By spreading your money over different investments (also known as diversification) you can potentially lessen the risk of losing money.
  • If you need to access your funds in the short-term, you may wish to consider holding them separately or investing into a lower-risk, accessible investment that has a more predictable return.
  • Remember that inflation can reduce the value of your money over time, so take this into account when choosing an investment.

What kind of investor are you?

Understanding what type of investor you are will help when it comes to deciding how much risk you're comfortable with. Check out the investor profile quiz on the Sorted website to help you decide.

Types of investments

There are two broad types of assets; income and growth assets. Income assets include investments such as cash and fixed interest, growth assets include shares and property. Income and growth assets perform differently under the same market conditions. Income assets generally experience less 'ups and downs in value', have potential lower returns and suit shorter investment timeframes. Growth assets generally experience more 'ups and downs' in value, have higher potential returns and suit longer investment timeframes. So many people choose to invest in a mix of these asset classes to achieve a balance of risk and return.


Investing in cash, such as a savings account, is typically a short-term investment that provides a return in the form of interest payments. Cash investments generally offer a slow and steady return compared to other investments.

Fixed interest

Broadly, there are two types of fixed interest investments:

Term investments: In exchange for depositing your money with a bank for a fixed period of time (like 6 or 12 months) you get a return in the form of interest payments. Typically, term investments (such as term deposits) are a lower-risk, fixed-return investment.

Bonds: A government, council or company (called the issuer) agrees to pay a certain interest rate (called a coupon) when you lend them your money for a fixed term. Many bonds are considered a lower-risk investment. The risk is dependent on a number of factors including the financial strength of the issuer. Unlike term investments it may be possible to sell your bonds early, but the price can fluctuate.


Residential property is a popular investment choice for many New Zealanders. Returns from this investment type can come from rental income and you may also make money if you sell the property for more than you paid for it. Of course, there’s always the risk that the property could fall in value or expenses outweigh rental income.

You can also invest in industrial, commercial and retail property, either directly or through property investment products.


Buying a share means you are buying a small part of a company. In return you may be paid a dividend. You might also get a capital gain if you sell your shares for more than you paid for them. While returns can often be good over the long term, prices might fall too. If you want to buy and sell shares directly, you need to do it through a NZX-registered company, like ASB Securities.

Investment risk/return profile

The following chart is a quick guide to the risk/return profile for each investment type. It isn’t meant to reflect the actual returns for any particular period, but shows the typical relationship between risk and return for each investment type.

Finding the right investment for you

There are different ways for you to approach investing. So before you start it's a good idea to do your homework and you may wish to seek independent advice. If you're comfortable making your own investment decisions, you can invest directly into many investment products, including cash, term investments, shares, investment funds and more through ASB. If you feel you need advice, you can always talk to a financial adviser. They will work with you to understand what you are hoping to achieve, and provide advice on the right investments for you. They can also take away a lot of the administration and paperwork associated with managing a portfolio of investments.

How can we help?

ASB has a number of different investment choices and the expertise to help you find the right investment. If you’d like to talk to someone, call us on 0800 803 804 or visit an ASB branch.

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Disclaimer: The information contained in this ASB website is for informational purposes and is designed for use by New Zealand residents only. It has been prepared without taking account of your objectives, financial situation or needs. This information does not constitute advice.

No person guarantees the financial services or products offered or any of the investments or returns made in respect of the financial services or products. The financial services and products are subject to investment risk including loss of income and principal invested. 

ASBGetting started investing - The basics of investing