World investors week
This week is World Investor Week and the Financial Markets Authority (FMA) is urging Do It Yourself (DIY) online investors to pause before succumbing to Fear of Missing Out.
Recent research by the FMA into online platforms found that 31 % of all DIY investors jumped into an investment in the last 2 years because they were afraid of missing out and 27 % said they invested based on a recommendation from a person they knew without doing their research.
A good understanding of online investing, its risks, market volatility, your appetite for taking risks, your time horizon, a good understanding of the share market is necessary before jumping into it.
The FMA is urging investors to follow these 5 D’s of doing yourself investing.
1. Do your due diligence, ask questions concerning your investment
2. Drip feed your investments; invest regularly, for example, weekly, fortnightly to take advantage of dollar-cost averaging and power of compounding returns.
3. Diversify your investment into cash, bonds, property, and shares. This protects you from the risk of a single investment going wrong and increasing your chance of losing a significant percentage of your money.
4. Don’t freak out if markets go down; markets can be volatile with share markets fluctuating often, it’s important to understand your appetite for risk and your time horizon
5. Get financial advice; Financial Advisers have the appropriate training required to assist you to make good financial decisions
