Before you leap into any investment decision, there are some important rules you should follow: 1. Set your goals

Most people assume that when it comes to investing, the best thing to do is take a rational, unbiased point of view that doesn’t take feelings into account whatsoever.  But is this true?  Or are there benefits to giving in to those urges to buy and sell when the logical viewpoint is the opposite

Many New Zealanders feel that they would rather stick close to home and invest in companies based in New Zealand.  Besides, it’s more work to research shares in foreign companies, and don’t you have to pay more taxes on shares held in international companies, anyway?  

See it in context It's important to know how your financial adviser gets paid, and the impact that can have on the advice you're getting. Knowing how they're paid helps you see their advice in context.

Advisers are required to tell you what fees they receive but these don’t cover all the fees associated with a product (such as monitoring, administration and trustee fees). Before you sign anything, make sure you know what fees you’ll pay. An easy way

Understanding the product range

Your investment profile will help you work out the type of investment you should consider.   There are four factors in your investment profile:

 

Money from individual investors is pooled and invested by a fund manager.

The aim of investing is to put your money to work now to make money to pay for the things you want to do later e.g. retire, travel, buy a

New Zealand has laws that regulate the way investments are offered to people. The laws are not designed to protect investors against

Putting all your money into just one investment breaks an age-old rule of investment - "don't put all your eggs in one basket".

Every investment has risk. Risk is the chance that an investment will not be as good as you expected or were promised.

A sentence in a recent speech by Reserve Bank Governor Alan Bollard caught my eye. "New Zealanders invest about twice as much in equities (shares) directly compared with managed funds," he said.

The best laid plans of investors often go awry (to paraphrase and Anglicise Robert Burns). A reader has made "an amused comment" about my recent statement that we should always buy shares with the intention of holding them for at least 10 years.

Gearing - which happens when you borrow to invest - comes at a price. And I'm not only talking about interest. While gearing makes a good investment better, it also makes a bad investment worse. People who gear boost their risk.

I don't get it. Politicians and economists have been complaining that rental property has tax advantages over shares. It's hardly a new claim. But what are these advantages - beyond depreciation, which is vastly overrated? Let's look at four categories:

There's more than one reason behind the old investment message that goes like this: If you need your money in just a few years invest your savings conservatively, but if you have a longer horizon take more risk.

I am 61 and in a private pension fund. Over the past two years I have lost more than I put in. Should I cease my contributions and place those in a savings account till the times get better and then put them back in the pension fund?