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Everything’s bigger in Texas, and the same could be said of the US share markets, which operate at a scale Kiwis don’t see every day. With Hatch, you can invest in over 5,800 companies and over 1,900 exchange-traded funds (ETFs). With so much choice, how do you choose the best shares to buy? And which investment could be right for you? The US share markets, the NYSE and the Nasdaq, are the largest share markets globally, and through them, New Zealanders can invest in some of the world’s largest and most innovative companies.
So how do you choose shares to invest in? First, let go of the pressure to choose the ‘best’ investment, because without a crystal ball, no one knows what the future holds. We can’t tell you the best way to invest your money, but we can share info to help boost your confidence when you buy your first shares.
How to pick a stock to invest in
Here are common investing approaches we hear from Hatch investors looking for the best shares to buy for their unique financial situation and money goals
Many start with brands they know and love
What products and services do you use every day? Are you a passionate gamer, a healthy lifestyle fanatic or lining up in your sleeping bag on Queen Street to buy the latest tech product year after year? You get it - you already know what you love, just look at where you choose to spend your hard-earned money.
You probably also know a lot more than you think about the companies you buy from. Do they keep innovating? Do they have quality products you want to own? Or services you need (or just really, really want)? If you think your own experience suggests the company may have a great future ahead, you may consider becoming a part of its long-term journey by backing what you believe and choosing shares in that company.
The best shares to buy - it depends on you!
Knowing what outcome you want from your investments, and having a goal in mind will help you to choose the best shares, or the best ETF for your individual situation. Are you looking to earn a passive income, maximise growth in the long-term, or prioritise growing your returns? The best investments for your situation depend on your goals.
Spread your money across multiple investments with ETFs
Exchange-traded funds (ETFs) can be a great way to spread your money across a whole bunch of investments at once, aka put your eggs in many baskets.
When people talk about the US share market returns, which have historically averaged about 10% a year, they’re typically referring to the average share price increase of the largest 500 companies in the world, known as the S&P 500 Index. Think Google, Amazon, Johnson & Johnson, Microsoft, and so on. They’re typically large global brands that many people know well. S&P 500 ETFs make it possible for anyone to spread their money across many companies at once.
If you’re looking for companies that pay dividends, another option is an index called the dividend aristocrats. Dividend aristocrat ETFs spread money across around 40+ worldwide companies that have paid dividends to shareholders for the past 25 years or more. Just keep in mind that while dividend aristocrats sound fancy (*tips hat*, M’Lady) it’s still not without risk. If you think you’ll need money in a hurry, quickly accessible cash in a bank account is still the reigning King.
ETFs may be a global phenomenon in investing circles, but if this is your first introduction to them, you can read more on the Hatch blog about the differences between companies and ETFs. And if you’re curious on how to find different companies and ETFs available on Hatch, we walk you through how to use search, step by step here.
Do your research before choosing shares: Look, listen and learn
For those that love to research, most of us carry a wealth of information at the touch of a button in our pocket; we’re just one ‘Hey Siri’ or ‘Hey Google’ away. Whether you use Google, TikTok or Chat GPT ask 'should I buy [company name here] shares' and voilà, you’ll see a stream of answers flood your screen. When you delve into multiple sources from the options that show up, you may start to notice common themes. These can help you get an idea of what analysts are thinking, any recent news headlines, and investor sentiment.
How to research shares: 5 simple steps for beginners
Get hyped about investor centres
But what are they exactly? Every company listed on the share markets is required to provide investors and potential investors with accessible info about the company. Hatch is super helpful and links to each company's investor centre when you click on their stocks in Hatch. Here are some examples:
Not all investor centres are beautiful, but they do provide a breadth of information that may be helpful as you make any decisions on how to choose the best investments for your situation and your goals.
Money-talk: Tap into your networks
After you make your first deposit into Hatch, you'll be invited to join Hatch's exclusive online community. Kiwis at every stage of investing - from beginners to long-timers - share their experiences and approaches to investing in the Hatch Investor’s Club, and all questions are welcome. Of course, none of our friendly community (or anyone except a financial adviser) can guide you on what to do in your personal situation, but you might find it helpful to hear how others got started, what motivates them, and what they look for when buying a stock of a company they know.
And you don’t have to stop there. It’s likely you already have friends and whānau who are keen investors, and who’d be up for a coffee and chat about the share markets. However, keep in mind that the best investments for them may not work for you. And if you’re a beginner, sometimes the best-intentioned ‘experts’ can unintentionally shred your confidence while they show off their share market prowess. They may know all the initialisms (ETF, P/E, IPO), have a sophisticated set of spreadsheets, and might have been successful in the past, but you need to be comfortable with an investment style that works for you.
Take it one step at a time
Investing can be one of the most empowering things you can do for your financial wellness. Remember that you don’t need to know everything to get started, and you definitely don’t have to start with a lot of money.
You can take the first step today by signing up to Hatch. It takes 30 seconds, it’s free, and you’ll get full access to start browsing companies and exchange traded funds and watchlisting shares.
Investing is all about you, your goals, and creating a plan to help you get there. Use your first investment as a tool for investing in yourself. You don't have to get it ‘right’, but use it to learn how to buy shares and get a feel for how the share markets work. And just like that you’re one step closer to making your money work for you. 😉
We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.
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