Investing for the long-haul

In this wide ranging interview Darcy sits down with Natalie Ferguson & Kristen Lunman from Hatch Invest to talk about encouraging good behavior from retail investors, why a Hatch employee’s kid loves him more because he owns Disney shares, and the benefits of planning for a portfolio nosedive.

***Note, for those using the audio only version, Kristen is the Co-founder with the Canadian accent and Natalie is the Head of Product with the Kiwi accent

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With retail investor mania clearly on the rise, there’s been a widely held opinion from the stiff lipped, long-time investors, that most of these investors are going in blind.

Perhaps this is true from the wider global community led by the likes of Davey Day Trader, but Hatch counts their users outside of this group. Hatch is on a mission to buck the trend of under-informed investors heaping into bad decisions by supporting initiatives that provide independent commentary/education; and it’s been returning dividends.

A recent survey of Hatch users found that a massive 97% of its users self-report having done their research before investing, through a combination of annual reports, analyst reports, and share price trackers.

“Well I think if you compare Hatch with any other investment platform, it’s our education which makes the difference. You get that education, you get that support, you get that community; to make wiser decisions,” said Natalie.

As head of product, Natalie has made a concerted effort to distinguish themselves from the likes of Robinhood in the United States. The retail investing app has seen widespread criticism for using nudge theory — the idea of encouraging behaviors through clever pushes that the podcast covered about a couple of months ago — to lure poorly equipped investors into frequent trading.

“My biggest concern is that the easier that you make something to get in, the easier it is to get out also”, said Darcy.

“We made the browsing experience pretty full on to start to make sure people did the research on what they wanted to invest in, without leading them into making a particular investment.”, Said Natalie

Hatch has intentionally designed the platform with small fees on each transaction, so as not to encourage frequent daily trades. They have also removed celebratory emails after every transaction, instead, they focus on celebrating things like receiving dividends at the end of year.

Passing down financial education

On the cards in the coming weeks, is Hatch’s first foray into investing for kids, which they see as a positive way to build better financial understanding amongst the next generation.

For Kristen, buying her son into Nike, one of his favourite companies, has formed the perfect introduction to investment education.

“It’s such a good way to get them engaged,” said Kristen.

Purposeful investing

One of the biggest lessons that kids and adults alike need to learn as the world navigates a highly uncertain world, is the idea of pre-determining your response to changing circumstances in the market.

“I encourage anyone who is investing anywhere, if things did go up or did drop it’s a really good idea to plan in advance for how you’re going to react,” said Natalie.

Whether it’s written down, spoken to a friend, or drawn on a notebooks somewhere; any investor should have a strong strategy for what happens when investments drop.

Naturally, seeing your important investment freefalling is going to be of concern, but with a coherent strategy in place, investors can feel confident of an eventual rebound.

“If when you look at your portfolio and it’s dropped and it’s the first time you’ve thought about it, you’re not setting yourself up for success,” said Kristen.

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The Challenge!

Start investing regularly. It’s not about picking stocks, it’s all about investing regularly towards an objective! The goal of the challenge is to get you to start making regular contributions to your investments, to build long term wealth.

Now to help you with this challenge, Hatch is going to give one lucky person a $500NZD top-up to their Hatch account. To enter the giveaway, head to:

https://www.hatchinvest.nz/nz-everyday-investor-giveaway

Terms and conditions: https://www.hatchinvest.nz/nz-everyday-investor-ts-and-cs

Just pop down your email address and your goal you have when it comes to investing – that’s right – if you put it out there, it’s more likely to happen.

The challenge will run from Monday 16 November to Monday 30 November, and the winner will be announced on Tuesday 1 December. So don’t put this off – if you’re in a position to do it, click on the link now. If you work for money, put some of it to work for you today – good luck!

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The NZ Everyday Investor is brought to you in partnership with Hatch. Hatch, let’s you become a shareholder in the world’s biggest companies and funds. We’re talking about Apple and Zoom, Vanguard and Blackrock.

So, if you’re listening in right now and have thought about investing in the US share markets, well, Hatch has given us a special offer just for you… they’ll give you a $20 NZD top-up when you make an initial deposit into your Hatch account of $100NZD or more.

Just go to https://hatch.as/NZEverydayInvestor to grab your top up.

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NZ Everyday Investor is on a mission to increase financial literacy and make investing more accessible for the everyday person!

Please ensure that you act independently from any of the content provided in these episodes – it should not be considered personalised financial advice for you. This means, you should either do your own research taking on board a broad range of opinions, or ideally, consult and engage an authorised financial adviser to provide guidance around your specific goals and objectives.