| | |
Homepage | login or create an account

Eight Rules For Sorted Investing

Coin Stack: Eight Rules for Sorted Investing
Coin Stack: Eight Rules for Sorted Investing

Before you leap into any investment decision, there are some important rules you should follow:

1. Set your goals
Decide what it is that you are trying to achieve. Where do want to be
at some point in the future? What is the final outcome that you want
from your investments and what is your time frame? Think about debt - is investing the right option for you right now? Would you be better off using your money to pay off high interest debt (e.g. credit card, hire purchase), or to reduce your mortgage? 

2. Know your risk profile
You need to know what sort of investor you are - essentially, how much
money are you willing to lose? How much volatility (ups and downs) can
you tolerate? To work out your risk profile, use the Risk recommender (on

3. Know how you want to invest your money
What type of investment suits your risk profile? Bonds, shares, property, short-term bank investments? Will you invest directly yourself or use managed funds? Sorted’s Investment recommender can help here. Talk to a qualified financial adviser.

4. Do your homework
Research, compare and contrast everything – or get someone to do that
for you. Read the business sections of the newspaper; go online; talk
to your adviser, bank manager, or accountant. Get a feel for which
company is respected, which is offering consistently good returns.

5. Research different companies’ investment options
If you are going to invest directly in a company, find out which
companies suit your profile. Do they offer the type of investments you
are after? What are the rates of return for each investment? What is
the level of risk associated with the return?

6. Research the companies themselves
What does the company do? What markets is the company in? Who is running the company? Have they ever been declared bankrupt?
How is the company run? Does the board have independent directors?
How has the company performed in recent years - is there a steady performance over time?

7. Seek independent advice
Contact an investment adviser – but be sure they’re independent. See our checklist of what to look for.

8. Spread your risk
Don’t put all your eggs in one basket – spread your risk
around different options and different companies. For example, if you
are considering high risk investments, you can balance your risk with
other investments in lower risk areas, like short term deposits or cash
and bonds.


Content provided by


Credit Card Comparison TablesCompare Credit Cards - Independent interest rate and fees comparisons for New Zealand banks.

About : money

Find the latest money news and 'how to' guides on Guide2Money.

Ask our researchers your personal finance questions.

Your Questions. Independent Answers.