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6 things to do as you DIY invest

9 August 2021
Reading time: 5 minutes

Posted by Kate Reddington , 2 Comments

Fair to say we’re comfortable managing our money in digital environments. We’ve been doing most of our banking online for years, after all.

Now, investing in shares and managed funds is just as easy. Instead of depending on a broker or investment adviser to pick shares or a fund for us, these days we can DIY – sign up to a platform like Sharesies, Kernel, Stake, Hatch or InvestNow, and away we go.

We’re so comfortable that up to 55% of Kiwis under 40, according to a Financial Services Council survey, are using or likely to use these platforms.

Yet like any DIY project we get up to at home, it can help to turn to the trusty professionals to get a few tips before we start. There are a few important things to keep in mind, no matter which kind of investing we’re considering.

Here are six rules for investing – particularly when it comes to digital platforms.

1. Set clear goals: why are you investing?

What’s your motivation for becoming an investor? What’s this money going to be for? Understanding your goals will help you understand what to invest in, how much you should invest, and for how long.

If you’re just looking to start learning about investing, giving it a go using digital platforms is a great way to learn.

But if you want to become a millionaire by the time you’re 30 – that’s not going to happen by accident nor by finding just one investment that’ll make you millions – despite what your friend’s brother’s neighbour’s cousin said about crypto.

Now that’s not to say crypto hasn’t made some people money (at least last week), it’s just that for long-term sustainable investing, you’ll want a plan, some good advice, and an understanding of the basic rules of investing, regardless of where or how you choose to invest.

2. Find the right balance (between risk and return)

Risk is the possibility that our money will not be there when we need it. Risk and return go hand in hand, so the bigger the gains we chase, the more risk we have to be prepared to accept. Shares are typically the investment type that carries the possibility of highest returns – but alongside the highest risk.

Higher-risk investments tend to be more of a rollercoaster (we’re looking at you, shares). If your goal is 10 years away or more, considering a higher-risk managed fund will mean you’re still likely to come out on top, despite some bumps along the way.

If you’re investing for a short-term goal, a higher-risk investment means the money might not be there when you need it. Generally speaking, lower-risk investments like cash, term deposits and even some bonds are good for short-term goals. You can research and access these products online too!

Find out what level of risk suits your goals with our investor kickstarter.

3. Learn your asset mix

Learn your what? Your asset mix (aka asset allocation) is the mix of investments you choose.

For example, a managed fund (that’s what your KiwiSaver is) will typically have a mix of the main kinds of investments. These are cash, bonds, shares and property.

A growth investor, for example, would have a mix that includes more shares or commercial property – these are called growth assets and tend to have a higher risk but also a better chance of higher returns.

Our investor kickstarter can help you work out what investment mix matches your investor type.

4. Remember to diversify 

Why do we spread our investments? Simply put, it’s to manage our risk.

Putting your money in a range of different investments (within a mix of different kinds of investments) helps to smooth out the ups and downs. If you’re considering high-risk investments, you can balance them out with some lower-risk types as well, like cash and bonds. While some investments will do badly, others will do well.

When you’re picking individual companies, even if it’s just tiny slices of ‘fractionalised’ shares, you need to work a bit harder to spread your risks, which helps protect you from losing all your money.

Managed funds make it easier to invest in a variety of companies and industries – both here at home and overseas. Each fund has a mix of investments, so when you put your money in, a professional is doing the diversifying for you.

5. Do your research into the investments

Compare and review choices. There are so many to make – and it can help to invest in companies and industries you know most about.

When choosing shares, research the fundamentals of the business, the industry, and the risks that come with it. When picking a managed fund, look at how much you’ll pay in fees, what services you’ll receive and lastly, whether returns have been consistently lower than its peers (which may be a sign of poor management).

While looking at your options for investing, keep in mind that looking at past results is not a reliable way of predicting what the future will bring.

6. Grow your money!

Build your investments, your portfolio and your future choices. This is where our favourite sayings come in:

Investments grow and compound over time. By contributing regularly, you’re increasing your returns and interest all the time.

Then the investment returns and interest start earning returns and interest of their own – eventually extending out to more than you initially put in yourself.

Still wondering about investing?

If you have any questions – ask us! We’ll be responding to the many that come in during Sorted Money Week, 9–15 August.

Comments (2)


  • Gravatar for Adrian

    29 August 21

    I'm paying $50.00 a week Auto share is that good or bad

  • Gravatar for Gill

    22 August 21

    Thanks - great to have impartial advice.

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