Busting the myths of investing

Myths can be fun – but they can also be misleading. Here Murray Harris, General Manager, KiwiSaver and Investment Funds at Milford lists the major, mistaken barriers that dissuade people from investing.

To paraphrase former USA President John F. Kennedy: The great enemy of the truth is very often not the lie…but the myth: persistent, persuasive and unrealistic.

Perhaps nowhere is that more accurately played out than in the broad field of financial investment – and I’ve isolated seven of the most common myths that persistently persuade many people, who would otherwise benefit from investing, not to try it. It’s everything from “I need a lot of money to be an investor” through “it costs too much” to “all KiwiSaver providers are basically the same”.

The over-arching truth? History shows share markets go up and they go down in value.

However, history also shows that, over the long-term, the value of money invested in share markets tends to go up and, with ongoing contributions, plus the power of compound returns, share-based investments can grow exponentially.

So, below are seven myths which are, as JFK said, the “unrealistic” barriers to investing.

Myth 1: Investing is too risky
Investing will always carry some level of risk, as there can be no guarantee that your investment won’t lose value. However, the potential for earning a higher return over time from KiwiSaver or Investment Funds can be greater than the potential return from a savings account at a bank or a term deposit.

Successful investing is about managing risk, not avoiding it. Understanding the relationship between risk and return is one of the most important principles of investing. In general, growth funds, which invest primarily in riskier assets like shares and property, should produce higher returns over the long-term than conservative funds, which invest mainly in less risky assets like cash and bonds. It is important to consider your investment goals, risk tolerance, and time horizon before making investment decisions.

Myth 2 – Professional financial advice is too expensive
There’s a misconception that financial advice is only for the wealthy – when advice is more accessible now than it’s ever been. That’s because technology has levelled the playing field, enabling more people to access free digital advice anywhere, anytime, on any device.

Many KiwiSaver providers also provide access to a financial adviser at low or no cost. Most people want to be able to retire on their terms. Getting advice on your terms and ensuring you’re saving and investing in the right way can really help.

Myth 3 – The markets are too volatile to invest
Volatility can create buying opportunities. You may have heard the old investing adage, buy low and sell high. If investors continue to invest through periods of market declines (volatility), they can essentially buy when prices are lower.

For example, if the units in your investment fund or KiwiSaver fund are valued at let’s say, $1.00, then you will get 1 unit for every $1 you invest in the fund. If markets decline in value and your fund’s unit price falls by 10% then your fund’s unit price would fall to 0.90 cents. Now, every $1 you invest will buy more units, because the unit price is lower. You will get 1.1 units rather than 1 unit. Essentially you are getting more units for your money – it’s similar to markets being ‘on sale’.

Volatility should be less of a concern for long-term investors – the investments have more time to ride out short-term market fluctuations and take advantage of buying opportunities.

Myth 4 – KiwiSaver is merely a savings account
Yes, contributing to your KiwiSaver account is a form of saving – but don’t be misled. KiwiSaver contributions are invested into a KiwiSaver Fund, which invests in financial assets like shares and bonds. Specific investments held in a particular KiwiSaver Fund depend on the fund manager’s strategy and the objectives the fund aims to achieve.

So, KiwiSaver should be considered an investment, as it involves investing money with the goal of potentially earning a return. For many, KiwiSaver will become one of their most valuable assets, so it is vital to make sure it is managed by regulated investment specialists who will do their best to make the most out of it.

The management of an investor’s KiwiSaver account can quite literally mean the difference of thousands of dollars at retirement. Do the research – and make a change if you think your investment could be doing better.

Myth 5 – All KiwiSaver providers are pretty much the same
Not all providers are the same; they vary from big banks to specialist investment companies. The investment strategies, investment expertise, the track-record of returns of the funds, and the fees can all vary, so choosing the right KiwiSaver provider and fund can make a difference at retirement.

The Milford KiwiSaver Plan Conservative, Balanced, and Active Growth Funds have been the number one performer in their respective KiwiSaver Fund category over the last 10 years according to Morningstar’s latest independent KiwiSaver survey*, delivering consistently strong performance through a range of market conditions.

Milford has been named Consumer NZ People’s Choice KiwiSaver 8 years in a row, and received multiple Canstar KiwiSaver Awards across recent years, including Most Satisfied Customers (2024 to 2025), Provider of the Year (2020 to 2025) and Outstanding Value (2020 to 2025). Canstar assesses areas such as customer satisfaction, performance, value for money, communication, customer service and investment options.

Milford was also named Gold Winner of the 2026 and 2025 Reader’s Digest Quality Service Award for Specialist KiwiSaver Providers, recognising our focus on supporting members and delivering a high-quality service experience.

Myth 6 – I need a lot of money to be an investor
It is generally a good idea to start investing as early as possible, even with only a small amount of money. Starting early gives investments more time to grow and to experience what’s been called the eighth wonder of the world – compound returns on the money invested. Plus, investing helps develop good financial habits that can benefit people throughout their lives.

You can generally start a KiwiSaver account with no upfront investment, and you can start an Investment Fund with a relatively small amount. Investing in a KiwiSaver Fund or an Investment Fund with Milford brings access to a professionally managed diversified portfolio, actively managed on the investor’s behalf by an expert investment team with a history of delivering strong results.

Not sure where to start? You can use the Milford KiwiSaver Digital Advice Tool to help choose the right Milford KiwiSaver Fund. If you want help choosing a Milford Investment Fund, you can get in touch with our team online or over the phone and we can guide you through your options.

Myth 7 – Investing is too complicated and time-consuming
Investing can be as simple or complex as you make it depending on your personal goals and preferences. If you are starting out, investing in a KiwiSaver fund and/or an investment fund with a professional fund manager is a good place to start. With an actively managed Milford Fund, investment experts do all the heavy lifting and detailed work – investors just need to choose a Fund that matches their goals, tolerance for risk and time frames, and then let our experts do the rest.