retire.co.nz

Investment profile

There may be many combinations of investments available which could be expected to provide a particular income or growth result in line with your requirements. However, investment of any kind has some element of risk, ranging from the low risk deposits in normal bank accounts to well known high risk ventures such as ostriches, some finance companies and currency futures.

Remember that often investments that achieve high real rates of return are those which involve the investor in the highest element of risk or volatility of return.

Diversifying across a number of different investment types is the best way to minimise risk while also taking advantage of the high growth investment opportunities. Each fund is already diversified or you can select several funds for your KiwiSaver investments. For details - see Investment Funds

What are your investment goals? How much risk are you comfortable with? Are you investing for the long term, or just for a few years? Where to start?

So, you've decided to join a KiwiSaver scheme. The next step is to work out what type of investor you are. This is really important since everybody sees things a little differently when it comes to investments. But before we start, here's a useful insight about choosing a balance between risk and return.

Finding the right balance for you

For a little word, 'risk' can pack quite a punch. It can often be the thing that puts people off investing. But it doesn't need to. When we use the term 'risk' in the investment world, we are referring to the extent to which its returns will vary over time. Generally, if the investment return over the short-term is fairly predictable, the investment is said to be of lower risk. While if the return has a greater potential to move up and down over the short-term, the investment is said to be of higher risk.

Investors may choose higher risk investments because historically the returns on some higher risk investments have been greater over the long term than lower risk investments. What's important is that you find a level of risk that you're comfortable with so that your savings can grow without giving you any undue worry.

Income or Growth?

Investments can generally be divided into two major investment types, income assets and growth assets. Here's what they offer.

Income assets
These are lower risk assets that primarily generate a regular income. Cash (e.g. bank term deposits) and fixed interest (e.g. government bonds) are both income assets that offer steady returns over time.

Growth assets
These are higher risk assets that have the potential to increase in capital value and deliver higher returns to investors. Shares and property are both growth assets.


For more information or to contact one of our advisors please contact us at the number below.