The Financial Market Authority (FMA) – The Financial Market Authority calls on DIY online investors to take a break from the World Investor Week (October 4-10) before they succumb to the FOMO investment.
The latest research by the FMA on online investment platforms showed that 31% of all online DIY investors started an investment in the past two years because they did not want to miss anything. Additionally, 27% said they invested without doing their own research based on a recommendation from someone they know.
The FMA campaign calls on investors to follow the “5 Ds of DIY investments”:
- Do your due diligence
- Let your investments drip
- Diversify your portfolio
- Don’t freak out when the markets are falling, and
- If in doubt, speak to a financial advisor.
A special type of DIY investor on which the FMA is concentrating is the “plant investor” identified in the study. Planters make up (42%) of DIY investors, the others are opportunists (19%), speculators (20%) and amateurs (19%).
Gillian Boyes, FMA investor capability manager, said planters are comparatively younger with a female inclination and view DIY investing as an essential part of their financial strategy.
“Our research has shown that planters have 52% of their investment portfolio on online investment platforms. This suggests that they invest a large chunk of their income in DIY platforms and may have more to lose in a market downturn with larger portfolios and less time to recover.
“Planters have good intentions to invest, but they don’t always do thorough research into potential investments, such as making decisions based on a company’s reputation. We’d like to use World Investor Week to remind DIY investors of good investment habits and steps they can take to protect themselves.
“As part of their due diligence, we encourage growers to ask themselves a few key questions before investing. These include: Will the investment generate an income? Do I understand the company I want to invest in? Is the share price appropriate? What are the fees or costs? How can I get my money back? Is it a legitimate offer? ”
One planter, Terry, began his investment journey several years ago when a group of his friends started a monthly investment club, each contributing $ 100 and making a new investment monthly. Terry said he enjoyed learning more about financial products and how the stock market works through DIY investing. He thinks it is important to have a diverse financial portfolio and of which includes investing in stocks. He is interested in medium to high risk investments with a long-term horizon and is not there for easy money.
About the World Investor Week
The annual World Investor Week is sponsored by the International Organization of Securities Commissions.
The FMA is the lead agency of the World Investor Week in New Zealand and is working on the topic, ‘Invest in FOMO? Take a mo ‘. In collaboration with the Pension Commission, NZX, the Financial Services Council, the NZ Shareholders Association and a number of private sector organizations. The FMA will share the five Ds of DIY investing over the course of the week.