Something for everyone

- BT Financial Group


What makes one investor different from another? That’s a hard question to answer but in a general sense it comes down to three points — how much time you have, how much interest you have in investing, and how much you already know. We’ve identified some broad categories or types of investor: hands off, hands on and old hand.

Are you a ‘hands off’ investor?

You know you need to invest to have the best growth or income potential and you have chosen a few funds in the past. You don’t really feel you know much about investing and you never seem to have the time to find out.

Perhaps you like the idea of using your money to make more money, but that’s the sum total of your interest in the subject. Either way, you’re hoping — rather than knowing — that everything is ticking along OK with your investments.

Three things to consider

• Know your funds: It sounds obvious, but it’s easy to forget — or not to know in the first place — what you’ve invested in. Make sure you re-familiarise yourself with your funds and broadly what they invest in.
• Understand why you’re investing: Are you still investing with the same goals and time frame? Regardless, it’s always a good idea to know why you’re investing and how you’ll achieve this goal.
• How much can you really invest?: A little bit more invested now could make a big difference down the line. One of the best ways to invest more is to set up a regular investment plan and make regular smaller payments each month, rather than a lump sum payment.

Are you a ‘hands on’ investor?

You may be a long-term investor or new to the market, but you’d definitely like to know more about investing. You want to be in a position to make better decisions about important issues, such as investing for your children or your retirement. You’re prepared to spend time and effort climbing the learning curve. You regularly check out online resources, read the finance and business sections of your newspaper and you like to keep a close eye on your investments.

Three action points for you

• Aim for a more informed view of your investments: Keep the reason why you want to be better informed in mind. Your main objective will be to make sure your money grows at a good rate or provides a high level of income. At the same time, you want to keep your investment risk to a comfortable level.
• Remember about rebalancing and diversification: Investments change over time, so it’s a good idea to check how individual investments sit within your overall strategy. If you don’t feel you have the expertise to put together a good mix of funds, talk to a financial adviser.
• Embrace the online world: The internet is a great place to dig up information about investing. You can read about investing, marketing insights and economics.

Are you an ‘old hand’ investor?

You already know about quartiles, indices and asset classes and feel you have a good knowledge of investing. You’ve picked a range of funds for your portfolio and you feel pretty comfortable with your choices and why you selected them. But you’re now interested in improving your returns by increasing your expertise.

Two tips to remember

• Analyse your portfolio: If you have quite a few investments it can be difficult to get an idea of the level of diversification in your portfolio. For example, BT Online gives you access to all their fund fact sheets which provide a breakdown by asset allocation, and performance to check your fund matches your investment goals. You can also view how your investments are spread across different regions and sectors. You may also be interested to see if any shares (holdings) are featured across multiple funds.
• Make more informed fund choices: Say, for example, your analysis shows that there’s a gap in your portfolio, and you don’t have much exposure to Asian markets, how would you find the right fund to take advantage of this? Fund fact sheets will enable you to identify these funds to their index and compare options in each asset class, risk and timeframe which suit you.

If you would like some help with what investments would suit your particular circumstances contact NZIJ on 0800 90 60 90 and we can refer you to one of our associated qualified financial advisers.