FAQs: Sharesies and COVID-19
Following this week’s COVID-19 government announcements, we’ve had a few questions come through about what it all means for Sharesies and your investments.
We know things might be feeling a little scary and uncertain right now, but we want you to know that we’re in this with you! We’ll continue to share info as it comes to hand—starting with a few FAQs and things to know.
As an investor, what should I be doing?
It can be pretty unnerving to see a drop in your Portfolio, so we totally understand if you’re feeling a little panicked and wondering if you should sell—there’s even a name for it: loss aversion!
In times like these, there are a few things that are worth keeping in mind.
Locking in a loss
If you buy shares for $10, and they drop in value to $8, you may feel like you’ve lost $2.
In reality, it’s only a “paper loss”, and you only “lock in your loss” when you sell your investments. Regardless of what the current share price is, you still hold the same number of shares.
Consider your investment strategy
Everyone has a different investment strategy, so it’s important to figure out what’s right for you. You may want to consider your time horizon, or your investment and diversification strategy.
Many Sharesies investors adopt a strategy called dollar-cost averaging. This is when you invest the same amount on a regular basis, regardless of what the share price is. The key to this is to continue to buy when the markets are down—no one wants to buy things only when they're expensive!
Market dips have happened before
While we can’t predict what’s going to happen in the future, it’s normal for share markets to go up and down. Historically, the major share markets have always bounced back—we’re talking World Wars, recessions, outbreaks, and more!
Will the New Zealand Stock Exchange (NZX) stay open?
Yes! The NZX has released an announcement confirming that the capital markets are an ‘essential service’ that will remain fully operational at Level 4 of the COVID-19 response.
You can find the full announcement over on the NZX website.
Will Sharesies stay open?
Yes! As a financial services provider, Sharesies is an ‘essential business’. This means that we’ll be business as usual (although instead of working from our usual Sharesies HQ, we’re all working from home).
You’ll be able to continue placing buy and sell orders, and getting any support that you need from our Investor Care team.
Are my money and investments safe?
Yes! At Sharesies, we have a custodial service. All your money, and any investments in managed and non-listed funds, are held in Sharesies Nominee Limited—this is separate from Sharesies Limited, which employs our staff, develops and maintains the platform, and does everything else in between to run the company.
Any investments that you make in companies or funds listed on the New Zealand Stock Exchange (NZX) are held in the NZX Depository under the name New Zealand Depository Nominee Limited.
If anything were to happen to Sharesies Limited, your money would still be safe because it’s held completely separately in Sharesies Nominee Limited and the NZX Depository!
We hold your money and investments in Sharesies Nominee Limited and the NZX Depository ‘on bare trust’. This means we’re holding it on your behalf and in our name, but they still belong to you. We can’t do anything to your money or investments unless you tell us to (e.g. when you use Sharesies to deposit/withdraw money, or buy/sell shares).
You can read more about this in our Behind the Scenes blog.
Let us know if you have any other questions!
In the meantime, stay safe, be kind to one another, and reach out if you need it. We’re always available for a chat—just email email@example.com and we’ll get back to you as fast as we can. 💖
Ok, now for the legal bit
Investing involves risk. You aren’t guaranteed to make money, and you might lose the money you start with. We don’t provide personalised advice or recommendations. Any information we provide is general only and current at the time written. You should consider seeking independent legal, financial, taxation or other advice when considering whether an investment is appropriate for your objectives, financial situation or needs.