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Two golden rules of investing

1 December 2023

Leslie Li & Doris Wang
Two-golden-rules-of-investing

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Doris Wang and Leslie Li are investment advisers with Craigs Investment Partners. They share two simple, but not easy golden investment rules and their view on the role of a good financial adviser.

Change is the only constant in life. As a result of changes in your personal situation and challenges faced, the needs and reliance on your money will evolve over time. Life doesn’t move in a straight line, so it pays to have a sound financial plan and a good financial adviser to help you move towards your end goal. When investing we believe there are two simple, but not necessarily easy to execute, rules to always keep in mind. Following these should set you up well to succeed.

Leslie Li and Doris Wang Craigs investment advisers
Leslie Li and Doris Wang, Investment Advisers at Craigs Investment Partners

1. Any good adviser will advise you to diversify.

A fundamental rule of investing is not putting all your eggs in one basket. It’s the simplest yet most effective way to insulate against risk and help investors weather any storms. This means looking at all your investment assets and your exposure to risk in each of them. Diversification could mean looking at a combination of cash, bonds, shares as well as listed and unlisted funds, to get the right blend of assets for each investor’s portfolio, says Craigs Investment Adviser Doris Wang.

“It’s an individual decision and one that we work closely with our clients to determine the right balance. New Zealanders are traditionally very exposed to the property market and as recent times has shown, any asset can experience fluctuations in value. It’s crucial to spread your risk and cover your bases, rather than being too concentrated in one particular asset”, says Doris.

2. Have a good investment strategy and stick to it.

As Craigs Investment Adviser Leslie Li explains, this second rule might sound simple, but it can be much harder to follow in practice.

“Setting a strategy involves more than choosing a diversified portfolio of investments. It’s a plan of action tailored to the individual for the good times and hard times. It’s a consistent and disciplined approach which manages risk, focuses on the determined time horizon, ensures that investments are suitably diversified, and adapts to market changes over time.”

“It’s a fairly common misconception, but the role of a good adviser is not to try and predict the path of financial markets. It’s about constructing your portfolio in a way that grows your wealth based on your goals, needs and risk appetite and is sturdy enough to withstand changing market conditions.”

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Leslie Li & Doris Wang

Leslie Li & Doris Wang

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Keep up to date with our fortnightly Market Insights enewsletter. Our research team provide timely and regular commentary and analysis on market developments, understanding investment jargon, and the impact of current events.

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