Today’s investor faces many choices. Investments can be in shares, bonds, investment property, bank deposits, domestic or international assets, directly invested or via managed funds, stand-alone or part of an investment portfolio. There are many possible options — it can be hard to know where to start and there is a risk of making poor decisions if you are not properly informed by receiving good investment advice from an investment adviser in New Zealand.
Before making any investment it is best that you undertake a thorough enough review and analysis of your goals and circumstances. Take some time to think about the following:
Investment goals:What goals do you have? Why do you want to invest? Are you saving for retirement, do you want to be mortgage free, have you planned an international holiday, or are you saving for your child’s education or to pass on to your heirs?
Income needs:Given these goals, what are your estimated current and future income needs? You need to consider your age and also your dependents’ ages. How long do you plan to be working? What other things need to be considered: mortgage payments, annual holiday, a new car? Your on-going need for income will be a key input into an investment strategy makeup.
Timeframe:Over what timeframe are your goals planned? When do you need to withdraw money? Do you need a regular income flow over a set timeframe or do you need a lump sum on a specific date? Generally, longer term investments are able to ride out the usual fluctuations in market and investment values.
Risk appetite: Review your appetite for risk — the ‘sleep at night’ factor. Very few investments are guaranteed. Would you be prepared to lose a large proportion of the funds invested? Could you lose some if you knew a percentage was guaranteed? Do you need instant access to your investments?
Investment structures:Is the investment personal or for a family trust? Do you wish to take a hands-on approach or would you like someone else to manage the process for you? Do you have any existing investments, for example a KiwiSaver account or rental investment property? Are your investments stand-alone or part of a managed investment portfolio?
Insurance: What would happen to your investment goals if you were out of work due to sickness or injury? Do you need to consider insurance for certain situations?
These are just some of the issues to consider before investing. Once this analysis process is complete, your SHARE adviser can help you determine what types of investment best suit your personal circumstances.