The Financial Markets Authority (FMA) is using World Investor Week this year to remind thousands of new Kiwi investors to do their homework and understand the risks of investing in financial markets.
Globally, there has been huge growth in the number of people investing in shares and other assets, often through popular online investing platforms. In New Zealand, local online investing platforms report that an estimated 120,000 Kiwis have joined their platforms since the first COVID-19 lockdown.
It's estimated that more than 250,000 New Zealanders are using Sharesies, Hatch and InvestNow, with three-quarters of users aged 25-44. The FMA has been engaging with each of the platforms to understand how they are helping this new wave of investors understand the fundamentals of investing and navigate the landscape.
Consumer interest in direct investment remains high, despite the ongoing economic uncertainty due to COVID-19 and the potential for further volatility. The FMA's Investor Confidence Survey, conducted during the first COVID-19 Level 3 lockdown, found investor confidence was steady in the face of market fluctuations. Nearly a third of investors (29%) said they were "looking for opportunities" in the market this year.
Against this backdrop, the FMA says its focus for this year's World Investor Week, from 5-11 October, is on this new generation of investors.
The FMA has partnered with Mary Holm ONZM, author, columnist and one of New Zealand's most trusted money experts, to create a beginners' guide that debunks eight common myths and misconceptions about investing.
Hits and myths: an introductory guide to investing by Mary Holm completes the FMA's suite of materials introducing Kiwis to common investment classes.
Gillian Boyes, FMA Investor Capability Manager, says: "While DIY investing can be a great way to experiment and learn with a small amount, you need to do your homework before you buy or sell. Most importantly, ensure you get that information from reputable and independent sources, rather than following the herd on social media platforms, or listening to those with vested interests.
"Just as you shouldn't buy a house without doing the pre-purchase checks, the same goes for financial investments like shares, as well as bonds and managed funds including KiwiSaver."
World Investor Week is a global campaign promoted by the International Organization of Securities Commissions (IOSCO), which raises awareness of the importance of investor capability and protection. This is its fourth year, with regulators in 92 jurisdictions taking part.
New Zealand kicked off the global campaign with a ring of the NZX bell in Wellington this morning. Ms Boyes says: "Wherever we are in the world, the same investing fundamentals apply. A smart investor does proper research, takes into account fees, understands that risk exists in all investments, and recognises the benefit of diversified investment that fits their long-term goals."
