1. Investors
  2. Deciding how to invest

Deciding how to invest

The 3 most important things to think about when deciding what to invest in are risk, return and cost.

Here are the steps to get you started:

  1. Find out how much risk you’re taking by investing. Risk isn’t a bad thing. We explain what it means and how you can assess and reduce your risk in understanding risk.
  2. Check what level of return you might expect. Will it be enough to help you reach your investment goal? Understanding return explains the different types of return and how you can check that the return you expect is reasonable.
  3. Make sure the cost seems fair. If you’re paying high fees, typically you’d expect returns to be higher. Read costs involved in investing to learn how fees can impact your investment.

Compare investments, to see what the typical level of risk is and the type of return and fee you can expect. Question or avoid anyone who charges more than what’s typical. Remember, you should only take on risk if you need to, and the return you get makes that risk worthwhile.

If you’re not comfortable doing your own investment research, or you don’t have time, a financial adviser can help you. For KiwiSaver or other types of managed funds, your provider may also be able to help you through the process.