Should I, shouldn't I? Buy shares, bonds, funds, property, or other investments?
In recent weeks I've aimed my columns at people who have found themselves with no, or drastically reduced income.
Plenty of Kiwis have kept their incomes/savings and are looking to dip their toes into investing, or start doing it more regularly. Sharesies, which allows Kiwis to invest very small sums of money, has seen its customer numbers jump by 50,000 to 153,000 since the end of February.
If you have a little cash to spare, bumpy times can be a great training ground for investing. Just beware that the world of investing isn't totally normal. Don't be under the illusion that you're going to "back the truck up" as Craigs Investment Partners' Mark Lister puts it, and make a small fortune overnight.
Markets are impossible to predict. We can see similarities to previous downturns such as the GFC, but every recession is different, says Lister.
For example, the speed with which markets tanked when the world closed down was unprecedented. Most likely, says Lister, the worst-case scenarios have by now been built into prices you pay for investments. Expect a bumpy ride nonetheless as the lifecycle of the pandemic plays out on financial markets.
That all said, the rulebook is still useful when investing in a pandemic. You should have long term goals, you need to know your risk profile and time horizon, and you shouldn't put all your eggs in one basket.
If you can hold your nerve and your plan (providing it was good in the first place) you will most likely emerge from the great pandemic without too much financial damage, and maybe even growth.
Start by understanding if you're investing for the short term or the long term says financial adviser Murray Weatherston of Financial Focus. If you will need that money in the next one to three years, then shares and growth funds probably aren't for you until we get through this pandemic induced financial pickle.
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The two big differences from normal times, says Weatherston, are that we have more than the usual volatility (ups and downs) and could face a period of inflation that will most likely flow from the measures taken by the Government and Reserve Bank of New Zealand to keep the financial system stable.
Beware of your emotions standing in your way in uncertain times. You may feel fear, panic, over- or under-confidence, FOMO (fear of missing out) and other behaviours that can get in the way of sensible investing.
If these emotions are holding you back then set up a regular drip feed that allows you to invest a little regularly, no matter what sort of gymnastic moves the markets are making.
You do have to start somewhere. Lister was bailed up by friends last weekend for some advice about getting started. They could invest in an index fund, he says, but they could also choose a smallish amount and buy a few shares in a company that know a little about, such as A2 Milk or Apple, and use the investment to educate themselves. If the investment goes bad they're not going to lose too much.
The likes of Sharesies, Hatch, Craigs own mySTART portfolio and others allow you to invest very small sums without risking too much.
I also see potential property investors asking questions about when real bargains are going to be had.
Even more so than share investing, property is a long term game. You're not going to see short term capital gains, says James Wilson, director of valuation at Valocity. You therefore need to consider the long term rental returns of the property, not just if it's a bargain price.
Take the time to research the area, the property, the rental market, and upgrade requirements to get it into a rentable state, says Wilson. If you're making the purchase with a genuinely long term mind-set and can afford the property now, he says, then waiting for values to reduce significantly may not work for you. Those bargains may not happen in your area.