While your savings account has been gathering dust, the property market and sharemarket have both soared.

In light of this, you might think you could do better investing elsewhere – and you wouldn't be alone.

That said, you should always proceed with caution. There's no point taking unnecessary risks by investing in things you don't know about. And If you don't have the means to invest in property or shares, then you would be wise to keep saving or repay your existing debts.

Interest rates will not remain low forever. If they rise, and there is good reason to think they will, then you could see property and share prices fall, and your savings account might not look so bad after all.

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If you're considering investing, you need to be mindful of your options, what they entail and the commitment required.

Property

If you like the idea of property, then you need to be patient.

New Zealand has one of the most expensive property markets in the world. It is also increasingly difficult to get a mortgage and find a quality home at an affordable price.

While this may restrict you from entering the market, it should not prevent you from doing your research for when the market changes.

If you like the idea of property, then you need to be patient. PIcture / Getty Images
If you like the idea of property, then you need to be patient. PIcture / Getty Images

Shares

This leads to the most intimidating option, shares.

They have in fact provided attractive returns over the long term; you don't need a lot of capital and you can diversify your risk away from a focus on one country, sector or company.

If you are interested in the sharemarket, but don't know where to start, imagine it like joining a gym: there are different entry points and different options, depending on your objectives.

Investing in shares is the most intimidating option. Picture / Getty Images
Investing in shares is the most intimidating option. Picture / Getty Images

Fund investment

The option that demands the least amount of personal involvement is to invest in a fund.

This is like joining a group fitness class (fund). Everyone does the same workout and trusts their instructor (fund manager) to find the right balance between physical intensity and weight loss (risk and return).

As with all fitness classes, there are different funds with different objectives and there are different fund managers with different track records.

It's important to scan their websites and look for a fund and fund manager that appeals to you.

It is also not a lifetime commitment, so if you don't like a fund or don't see the rewards, change. Most funds can set you up online with your IRD number and proof of identity.

Wealth management firm

A slightly more involved option is to invest through a wealth advisory firm.

This is like having a personal trainer (adviser). You can get a more tailored workout (investments) that tries to meet your specific goals (capital growth and dividend income).

As with all personal trainers, there are different advisers with different qualities who favour different investments.

It is important to ask around and choose an adviser that has your best interest at heart. It is a personal relationship, but if it doesn't work out, you need to have the confidence to change. Most wealth advisers can set you up over the phone or in person.

Broker or online trading platform

The most involved option is to invest through a broker or online trading platform. This is like training yourself.

You get a unique workout (investments) with the freedom to choose what, when, where and how you train (specialisation or diversification).

As with all individual exercises, they require time, motivation and responsibility.

The most involved option is to invest through a broker or online trading platform. Picture / Getty Images
The most involved option is to invest through a broker or online trading platform. Picture / Getty Images

It is important to be selective and to choose investments you understand and that interest you. It is rewarding and educational, but if you lose the time or motivation, you should reduce the amount you invest this way. Most brokers can set you up online with your bank account, IRD number and proof of identity.

Like exercise, it is important to build your knowledge and confidence. If you have spare capital and are not familiar with the market, perhaps start with a fund or wealth adviser and then gradually build your own portfolio.

The views expressed in this article are those of Shareclarity Limited, a New Zealand equity research firm. They are provided for general information only and are not intended to be financial advice.