A grasp of basic investment principles – and a disciplined approach to their implementation – can guide the sharemarket investor toward accumulating wealth. Cameron Watson, author of Risk, Return and Reality, talks to Kristina Greene.
Sunday, September 25th 2005, 7:13AM
by The Landlord
Investing is simple, not easy, says investment guru Warren Buffett. The principles are not complicated – it is applying them that takes some brain power.
While property is a hard-to-shake all-time favourite of Kiwi investors, ABN AMRO Craigs head of research Cameron Watson says they need to maintain a balanced portfolio of investments to complement their exposure to the property sector. In his book Risk, Return and Reality he outlines the basic principles.
"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," Mr Watson says.
People may not need to learn everything – but you do need to know the basics to achieve financially and invest in a way to best suit your circumstances, he says.
With New Zealand companies performing well and strengthening both on and offshore, Mr Watson believes increased confidence levels will result in more New Zealanders diversifying 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."
