Shares

Many share investors get started buying shares on NZX-approved online trading websites. You can either buy shares in individual companies or invest in funds that hold shares.

These DIY platforms have made it extremely easy to get started in trading shares, although you’ll need to be comfortable making your own trading decisions without professional financial advice. But as long as you’re starting with small amounts (even as low as a cent!), you can give it a go and learn by doing.

Another way to invest in shares – and if you are in KiwiSaver, your fund likely includes some – is in a managed fund or exchange-traded fund (ETF). In this case a professional fund manager selects shares on your behalf, either more actively (doing research on the companies and trading them for you) or more passively (buying shares by automatically following a market index of shares). There’s more in our guide to managed funds and ETFs. This could be a good option if you don’t have the time to research individual companies yourself.

Many share investors these days get started with small dollar amounts on DIY platforms like Sharesies, Kernel, Hatch or Stake. And that’s a good thing, since we all learn by doing. We can get a lot out of the investing experience, and many of us are buying investment assets – which are things that can put money back into our pockets – for the first time. But as you get going, it will be useful to have a plan and a strategy for your investing. You want your shares to fit in with your financial goals. Here’s our investor profiler to help.

The important thing is to invest on a platform authorised by NZX, the New Zealand Exchange. Sharesies and other platforms are, but many more are simply scams. Remember that your money is a target, so be careful where you invest.

What you want is a ‘buy and hold’ strategy – to buy shares that you’d like to keep theoretically forever. That way you are not forced to sell them in a crisis for a lower price than you want to. Ideally you will be investing ‘little and long’, drip feeding your money into your portfolio of shares, or share fund, over many years. This way it does not matter if the market is up or down when you invest, and you can take advantage of companies’ growth when it comes.

Instead of having a professional fund manager do it for you (like we do in KiwiSaver), you can select shares of your own, either through a financial adviser or bank, or on a DIY platform like Sharesies, Hatch or Stake. The apps have made it easier than ever to trade fractionalised shares, which are tiny slices of a company, for as little as one cent.

It’s easier than ever to get started investing in shares on a DIY platform like Sharesies, Hatch or Stake. Because these apps have lowered the barriers to investing – in the past you’d have needed tens of thousands of dollars to get started – you can get going straight away with very little. Since we all learn by doing, this is a good thing. And when you are ready to risk more for a greater reward, you can step up your investing in other ways.

Instead of taking the plunge into share investing, you can start by testing the water with just a few dollars at a time – play money you can afford to lose. Some online platforms offer a simulator without any money at all, which can give you the experience of share investing without risking your hard-earned cash. To get the rewards of share investing, you’ll eventually have to risk real dosh, but at least you’ll have a better idea of how it all works.

In many ways they are one of the best wealth-building assets to own, but whether something is a good investment depends very much on what you are investing for. What is your goal for the money you’re investing? If it’s longer term, shares can be a good option. To see how well shares fit in your future investment mix, give our investor profiler a go.

Yes! DIY platforms allow you to gift shares, and there are now gift cards even. Have a look online at your favourite investing platform.