Investing is "Risky", but we’re here to help!

The biggest investment that most Kiwi’s will make in their lives is purchasing their first home.

It comes with its own set of risks as we have all seen in the falling house prices and increased interest rates over the last few years.

Most of us are happy to take those risks on, as we all want a place to call our own and something to pass on to future generations

Investment properties and building companies have long been the next step in the investment journey for many New Zealanders.

I am not here to dissuade you from pursuing the Kiwi dream of property ownership, but I do want to discuss how we can balance out some of the risks involved.

Here are four basic principles to keep in mind

·        No such thing as a risk-free investment

·        If it sounds too good to be true, it probably is

·        Diversification is not a dirty word

·        Time and consistency are your friends

There are risks involved in everything…

For example, leaving your cash in the bank will see it lose buying power to inflation over time and that’s a risk.

Heavily investing in property will tie your money up and leave you at the will of the property market, that’s a big risk too.

Talk to a professional to help you identify your risks, and work with them to build a solution.

If it sound too good to be true…..

Social media is a minefield of flashy adds, pulling you in with the promise of a risk-free pot of gold at the end of their rainbow.

Ever tried chasing a rainbow? Tell me how that went….

Get rich quick schemes are seldom designed to benefit the investor, they are set up to maximise profits for the joker running the show.

A good Financial Adviser will be aware and know what to look out for, they can guide you through your choices.

Diversification, it’s a good thing……

Having too many eggs in one basket has an obvious problem, what happens when the basket breaks.

Simple solution, many baskets!

These days, there are more Investment Fund Managers in Aotearoa than you can shake a stick at.

A managed fund from one of these providers is a really good many baskets investment option.

Broadly speaking, the majority of funds on offer from these providers, will be invested in thousands of different things, in all sorts of industries, from all over the planet.

Everything from government bonds, shares in startups and mid-sized companies, and stocks with the big players, will all form part of your diversified managed fund.

If you are looking to invest ethically, there are plenty of options there too.

A good Financial Adviser will help you pick the right fund to suit your needs.

Consistency is key and time reduces risk…..

Rome may not have been built in a day, but somebody laid bricks every hour until it was.

Set up a plan and stick to it; the more often you lay down bricks, the more likely you are to get to Rome.

As advisers, we work on the principle that the markets have more good years than bad years, and over time this reduces the risk in an investment.

The more time you spend laying bricks the better your chances of achieving the desired result.

A good financial adviser will help you understand how to make the risks involved work in you favour over the long-term.

Engaging a professional is the best place to start. It just so happens that the team here at DUX has a plethora of such professionals in our ranks…..

Maybe you should give us a call, we would love to help.