What advice can you give a beginner?

Wednesday 23rd January 2002

Q: I'm after info on newbie investing. I'm keen to invest slowly - learning as I go. Ideally I'd be interested in investing in a variety of businesses, that I can choose from a list of possibilities - is this something that is easily done? What amount of money will I need in order to begin? Is my first step to get in touch with a broker? How do I keep records of my investments? Can I pay weekly / monthly? So many questions! But it's a long journey - and I'm taking the first steps! Any suggestions are appreciated!

A: Have you worked your way through the Education Section of ShareChat? There is lots of useful information for the new investor. You don't need a lot of money to invest in the sharemarket and your can buy parcels for around $300-$400 at a time if you wish (although this tends to become expensive when you work out your brokerage fees as a % of the total you spend).

You can't 'drip feed' direct investment in shares but there are companies that offer different managed or tracking funds that will allow you make monthly contributions. These people will charge you a management fee for the privilege whether their returns are positive or negative. Buying into a fund is the best way to spread your risk rather than just purchasing one share.

Whenever you buy or sell shares you will be sent a contract note by your broker and you will receive a FIN & shareholder number from the Registry. You should always keep FIN & shareholder numbers safe and don't disclose the information to anyone other than your broker.

You can contact a broker anyway you like. Most brokers in New Zealand have their own websites which are an excellent point of first contact. These can tell you everything the broker can do on your behalf. Broker's welcome visits to their offices and always have staff on hand should you wish to phone (during office hours). Also, look at the Sharebroker Profiles on ShareChat.

Talk to other people you know who invest. They can be a fantastic learning tool, but take what they say with a grain of salt. Often people can be trying to talk up their favourite stock but you can learn valuable lessons listening to mistakes they have made in the past. Surf the net - the internet has given small investors access to information that used to be saved only for institutional investors. You just have to spend the time looking for it. ShareChat's External Links page offers links to lots of different local and international websites devoted to investment and financial news. Visit them and find out which ones are your favourites. I'm biased when it comes to anything about the NZ market - I think ShareChat is the best!

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