It has been my observation that Kiwis do not like investing in shares. Indeed, many will do anything to avoid buying them. But with interest rates so low, shares are gaining attention given many are currently offering dividend yields that are higher than deposit rates.
It is time to get over the 1987 crash and move on. Shares are an important investment to include in a portfolio. They provide income from dividends and the potential for capital growth over the longer term.
Avoid the devastating effects that can occur if the market falls sharply by investing only in strong, quality shares, and by never borrowing money to buy them.
When you start investing in shares it is helpful to understand that when you buy a share you are buying a slice of a business. As you go through the process of considering various shares, treat them as a business and imagine you are buying the entire company.
If you would be comfortable owning the whole company then it may be one for your portfolio. Buy businesses you can understand and that you like. And buy as many as you can find and afford. Diversification is so important when investing in shares because you never know how businesses will perform over the future.
You also want to buy at a reasonable price. A low price earnings ratio (the share price divided by the net profit per share) and higher dividend yield are indicators of a cheaper share, although shares with a high quality, low risk business, or that have more growth potential, deserve higher price earnings ratios.
Many share investors buy only larger blue chip companies, and for new investors this is a good place to start, as these companies tend to be more stable than smaller companies.
Begin with modest investments and gradually increase your exposure to shares as you learn more and become more comfortable with their ups and downs. If you"'""re like me, you may find that the dividends you receive are the best thing about owning shares, especially if you buy companies that are able to grow their dividends over time. Higher dividends are a great antidote to lower deposit rates.
It is time to get over the 1987 crash and move on. Shares are an important investment to include in a portfolio. They provide income from dividends and the potential for capital growth over the longer term.
Avoid the devastating effects that can occur if the market falls sharply by investing only in strong, quality shares, and by never borrowing money to buy them.
When you start investing in shares it is helpful to understand that when you buy a share you are buying a slice of a business. As you go through the process of considering various shares, treat them as a business and imagine you are buying the entire company.
If you would be comfortable owning the whole company then it may be one for your portfolio. Buy businesses you can understand and that you like. And buy as many as you can find and afford. Diversification is so important when investing in shares because you never know how businesses will perform over the future.
You also want to buy at a reasonable price. A low price earnings ratio (the share price divided by the net profit per share) and higher dividend yield are indicators of a cheaper share, although shares with a high quality, low risk business, or that have more growth potential, deserve higher price earnings ratios.
Many share investors buy only larger blue chip companies, and for new investors this is a good place to start, as these companies tend to be more stable than smaller companies.
Begin with modest investments and gradually increase your exposure to shares as you learn more and become more comfortable with their ups and downs. If you"'""re like me, you may find that the dividends you receive are the best thing about owning shares, especially if you buy companies that are able to grow their dividends over time. Higher dividends are a great antidote to lower deposit rates.
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