Monday 2nd May 2005
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"Investing is not rocket science, but we don't learn about it at school or tend to chat about it too much. There are some basic investing principles anyone can master.
Most people will have an investment advisor, so it's not necessary to learn everything. But because investing isn't a team game, investors do need to know the basics so they can achieve financially and invest in a way to best suit their circumstances."
With New Zealand companies performing well and strengthening both on and offshore, Watson believes increased confidence levels will see more New Zealanders diversify their investments in the sharemarket.
"Until now Kiwis have had an almost inbuilt mistrust of the sharemarket, mostly a hangover from the 1987 crash, so property became the preferred investment. We are also a nation of 'bricks and mortar' - we like to be able to 'see' what we own."
However, this psyche is changing he says. Investors are realising the importance of diversification and know balanced portfolios are their best protection against the myriad of risks that could undermine their financial wellbeing.
"The growth and increasing marketplace strength of New Zealand-based companies is also going a long way to help build confidence in sharemarket investing."
Risk, Return and Reality is a collection of Watson's ABN AMRO Craigs writings from the past five years.
"The book is not a get-rich-quick guide - I'd hazard to suggest such a device doesn't exist. It's for people who are serious about investing and consider protecting their money to be as important as making money."
Risk, Return and Reality is written in an easy-to-read style. Articles are separated into focused stand-alone sections, allowing readers to easily go to the topic relevant to them.
Risk, Return & Reality is available online through the Good Returns Bookstore at www.goodreturns.co.nz/books
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