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HOW TO GET RICH OR LOSE YOUR SHIRT TRYING

The views expressed in this article are of the writer’s own opinion and do not represent financial advice. If you do require financial advice then see your bank manager or financial advisor.
How to get rich or lose your shirt trying
By R. A. Stewart
“Just how can I get rich on the stock exchange.” That is the $64,000 question, one that has no definitive answer. The question should really be, “How long will it take for me to get rich on the stock exchange?” Investors who have kept up to date with the financial stuff in the newspapers and TV will know that the sharemarket is a long term game. It is time rather than timing which is the key, however, having said that, it is unrealistic for someone aged 60 to have a 30 year plan to make money on the markets.
A younger person, on the other hand is able to take more risks, because they have more years left to recover from financial setbacks.
Share prices do not always represent true value just as at the race track where the horse’s odds do not represent their true chances of winning the race. The share price is a reflection of the opinions of investors, this opinion can be based on fears, hope, or just plain greed. The share price will move in either direction on the back of news about the company.
The mum and dad investors who buys and sells shares is competing with some very astute investors. Many of whom are the best financial brains in the country, however if you have invested in managed funds as everyone enrolled in kiwisaver has you will have the benefit of these brains who are emplyed as fund managers working on behalf of you. There are other types of investments where you are able to dripfeed money into the sharemarket. Sharesies is one of these; you have the option of investing in managed funds or individual companies. This will give you experience and knowledge of how the market works. Another string to your financial bow you might say.
Someone’s loss can be your gain; when others are selling their shares you buy. There can be some good bargains in the sharemarket when investors are pessimistic and you can take advantage of this. We have seen with the coronavirus pandemic that the markets are struggling with the worst affected companies being airlines and other companies connected to tourism. They can bounce back once this is all over.
Many companies have professional directors whose task is to boost the image of the company. They do little else except be paid for the use of their name.
It cannot be stressed enough that if the possibility of loss is going to cause you sleepless nights then stay out of the sharemarket. Life is too short for it not to be enjoyed.
You should however still be signed up for the kiwisaver retirement scheme, because if you are not you are missing out on the $520 per annum government contribution and the 3% employer contribution. To receive the $520, you must contribute at least $1040
www.robertastewart.com
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HOW SHAREMARKET FORTUNES ARE MADE

The views expressed are of the opinion of the writer and do not represent financial advice. If you seek professional financial advice see your bank manager or other qualified professional.
Tomorrow’s sharemarket fortunes are made today
Written by R. A. Stewart
Did you know what you do with your money today can really make a difference to your future wealth? Fortunes are made in the sharemarket when you invest in shares not when you sell them. With the values of some sharemarkets on the slide in recent months (March/April 2020), it is an opportunity to pick up some shares at a bargain price.
Think of it as though you are supermarket shopping. Wouldn’t you be tempted to purchase fresh in season fruit at a low price instead of imported out of season fruit?
Tomorrow’s sharemarket fortunes are made today. The key is to buy low + time = sell high.
It has been said it is time not timing which is the key to building your wealth in the sharemarket.
The young have an advantage over the not so young in that they have time on their side.
That being said, even if you are approaching your retirement age you can take advantage of the next rising market.
You may have another ten, fifteen, twenty, or thirty years of life left in you; the determining factor in choosing where to invest your money is the time between now and then when you may need the money. It is a good idea to invest your money in several areas. That is in a conservative, balanced, and growth fund according to the purpose of the fund. That way if you need money at short notice you would use the money in your rainy day fund which should be in conservative funds or in an ordinary savings account.
It all boils down to developing the savings habit when you are young and continuing that throughout your life irrespective of how the markets are performing.
During the Global Financial Crisis (GFC) in 2007-2008, some of the companies I had invested money in went bellyup. Lombard Finance, Dominion Finance, and Provincial Finance. They were offering good rates on fixed interest deposits and the money I fell for it. I did get some of the money back which I deposited into my kiwisaver account.
I also had money invested in a carpet company named Feltex on the sharemarket and lost that as well during the GFC.
These losses did not deter me and I invested $500 in a managed fund through the Public Trust at around the same time. I invested $100 at a time into this fund and by the time it grew to $1800 stop contributing because I preferred to invest my money into my kiwisaver retirement fund. However the $1800 grew to $3,000 without any further contributions when I withdrew the money because the Public Trust were ending those types of investments.
If you want your ship to come in you have to send one out in the first place, not just one but several, and you shouldn’t wait until conditions are just right. Do it today!

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YOUR INVESTMENT GOALS

The information in this post is the opinion of the writer and is not considered as financial advice. If you need advice of a financial nature, see your bank manager or other financial advisor.
Taking stock of your investment goals
The sharemarket will be volatile for the duration of the Covid-19 outbreak and even longer, possibly not until 2022 will there likely to be a settling down period when the markets will recover so what should your strategy be?
If you are close to retirement and have seen your funds dwindle, that is up to you. Myself I think it may pay to just ride it out because investing in the markets is a long term game.
To change funds from growth or balanced to conservative funds will be like closing the stable door after the horse has bolted.
The damage has already been done. To be panicked into selling during a bear market is to take a loss and miss out on the gains once the market recovers.
A bear market is a buyer’s market and that is when it is most profitable to purchase shares.
The fund you chose for kiwisaver or mutual funds needs to be the right one.
The three main factors for choosing the right fund for you are;
1. The number of years left before you reach your country’s retirement age.
2. Whether you are going to use your kiwisaver as a deposit for your first home.
3. Your risk tolerance
Another factor is any medical condition which will reduce your chances of reaching the retirement age.be
There are three time frames which need to be considered, namely;
The short term (up to 1 year)
The medium term (within 5 years)
The long term (more than 5 years)
The number of years you have left before being eligible to withdraw your retirement fund is dependant on your age. This for most people is the criteria for choosing your fund type, (growth, balanced, or conservative,) but not necessarily because in New Zealand anyone can use part of their retirement fund as a deposit for their first home at any age. Furthermore, homebuyers are eligible for a grant depending on how long they have been enrolled in kiwisaver which makes joining kiwisaver a no-brainer.
The markets are on a rollercoaster ride, they go up and down and the worst thing which can happen is to save hard for a house deposit only to discover you have less money than what you had actually deposited in kiwisaver by the time you withdraw the money for your house deposit.
This is the reason why those saving for a house deposit in the short to medium term are advised by financial experts to invest in conservative funds.
The flip side to this is the slow returns because if you are saving money during a rising market your savings can quickly grow.
If you have zero tolerance to risk then the conservative funds may be your answer to a good night’s sleep.
Those aged forty and under may be advised to invest in Balanced or Growth Funds because they have time on their side for the markets to recover losses after a crash.
Your fund manager may be in charge of your investment but it is still your responsibility to plan for your future and set your own goals. No one can do it for you. Your goals, age, and risk profile will all determine which fund you should be in.
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