BusinessDesk's investment editor, Frances Cook, responds to readers' emails on a weekly basis to answer various questions about money. Below you'll find her expert advice on a subject she's extremely passionate about.

A reader writes to update us on their foray into forex investing – see their previous letter here.

Hi Frances,
I have read your response from the BusinessDesk column. I highly appreciate your time and advice.
Unfortunately, the forex broker that I was with has been identified by ASB bank as a scam/fraud. The Financial Markets Authority has been involved with the investigation and I am still waiting for the final findings about the broker.
You were hundred percent correct, I should have not jumped into this type of investment as I am a novice with forex.
You see, it all started with an anonymous call, the person on the other line was telling me that I have registered into their Learning Academy. Though I could not really remember registering into anything. But one thing led to another, I just found myself joining the broker company (saying they are based in Hong Kong). I have seen the website and I should have known better, but I was in denial? Or I was sweet-talked? I don’t know which is which. I have transferred money trusting their good intentions. But the joke is on me. My money went down the drain because of the market’s volatility, but the broker I believe has earned through commissions.
I am fully accountable for the outcomes as I have not done my due diligence. I should have sought some financial advice, but I thought I knew better. And look where it brought me. I even applied for a loan just to boost my “Free Margin” from the trading platform. I should have just left my money in the bank under the term investments that it was in.
This is definitely the biggest lesson I have learned. I thought 2022 is my financial year. Haha!
I just hope people will learn from my mistake. I am praying no one else would be a victim of these predators. It’s traumatising and causing emotional damage.
But I won’t be hindered by this incident to make another investment.
In fact, I have been investing with Sharesies, my KiwiSaver and starting with Hatch and InvestNow. I cannot wait to have ample free time so I could continue reading your book, though I am still in the Fire up part but at least I am progressing from the Introduction.
Frances, once again. Thank you so much for your time and I apologise if you have been an outlet for my emotions. I just feel like sharing it with someone who understands, to lessen this burden that I am carrying, but I am starting to move on, baby steps.
Have a great day, Frances! Thank you for your passion for sharing free financial advice!  


Hi N,

I’m so sorry to hear that it was indeed a scam – this is one of those situations where I always hope to be wrong.

Please don’t be too hard on yourself – these scammers are pros at drawing people in. The good thing is that you realised what was happening before you lost any more money. I hope that the investigation goes well.

I’m glad it hasn’t put you off investing entirely, because it’s still a really good thing for your future. It sounds like your new investment plan is a lot safer.

To recap for yourself and other readers of this column, I think the big takeaway is to be extremely wary of sending your money overseas. 

Even if you get scammed by someone who is in New Zealand, it’s hard to get the money back. If you invest through a company that is based overseas and it turns out to be a scam, you might as well immediately give up. Often the authorities here have no way of getting it back for you.

If someone cold-calls you, that’s another big red flag. It’s actually illegal in NZ to sell financial products through cold-calling, or them getting in touch with you first. This includes insurance, KiwiSaver, investment products, and mortgages. Legitimate investments wait for you to call them first. If they don’t know or don’t care that it’s illegal for them to be reaching out to you first, and try to make a hard sell … then that’s a company to stay well away from.

Of course, investing is still really important for building wealth for the future. Your money needs to grow over time, in order to beat inflation, otherwise known as the slow increase in living costs. Milk costs more now than it did when our grandma was young, as everything increases in price over time. Investing your money helps you stay ahead of that and look after yourself in the future.

So, I’m glad to hear that you’re now looking into KiwiSaver, and NZ-based platforms such as Sharesies, Hatch, and InvestNow. Because those platforms are based in NZ, and subject to NZ regulations, it means you have legal options if something goes wrong. They also offer proven investments such as shares and bonds.

Another bonus of using those platforms is that they have some good investor education on them, including free courses and podcasts to listen to. If you can find the time, do make use of those freebies. Sometimes the best investment is into our own knowledge!

Thank you for giving me permission to publish this update on your situation. Hopefully, it helps other people avoid falling into the same trap.


Kia ora Frances!

I have a question about shares. I've been using Sharesies for over a year now and I was feeling good about getting started in investing, but my shares have plummeted lately, with some funds being much lower than others. I hear lots about "buy and hold" but I also hear about people losing money from bad investments! How do I know if I've chosen a "bad" fund that I should withdraw from a.s.a.p. before I lose more money, or if this is just a blip and the fund will level out with time?

Sharesies organises things by risk, which is helpful, but it's my lower/medium risk fund that I'm most concerned about!

Any advice on how to know whether it's a wave to be ridden, or whether it's best to cut my losses and jump outta the ocean?!

Ngā mihi,



Hi S,

This is a great question. When the market is down overall, how do you know what’s normal, and what might be a real danger to your money plans?

First, as you already seem to know, the entire market isn’t great right now. My investments are down, too. In fact, the most recent survey from Morningstar showed that every single multisector KiwiSaver fund lost money in the first quarter of 2022. 

KiwiSaver is, of course, simply a type of investment fund. It’s also a type of investment that is closely monitored, so it’s a good one for us to look at and get a feel for what’s going on overall.  

So, let’s stick with that Morningstar KiwiSaver survey as a way of figuring out what’s going on. The average conservative fund was down 3.9%. So that’s a good guide if you’re investing in things like bonds. 

If your bond fund has dropped significantly more than that, you might have some questions. If it’s around that number or has even dropped less, you’re probably doing OK.

Meanwhile, the average growth fund was down about 5.7%. So, that gives us a comparison of what’s happening in the share market, and other growth assets, like property funds. 

If you’re down quite a bit more than that, then again, maybe not great. If you’re down by about that much, then you’re just following what’s happening to everyone else.

Honestly, though, you may not even need to look at the numbers. I think that, at times like this, the most important thing is to get back to the fundamentals of why and how you’re investing.

You mentioned that you’re investing in funds. That’s a great strategy, particularly at a time like this. Investing in just one or two companies is risky. Bad luck is rampant right now, and a company that is otherwise doing well could get knocked sideways by an unexpected covid impact, or critical supply chain issue, or whatever other problem is floating around right now. But a fund that invests in 50, 200, or 5,000 companies? You’re spreading out your risk of bad luck.

At times of insecurity, that spreading around is key, otherwise known as “diversification”. You don’t want to be investing in just one company, just one industry (such as tech stocks), or even just one country. The wider you spread your money around, the more you get to simply ride the waves, without suddenly realising there’s a hole in your boat.

If you have invested in some single companies or even single-sector funds such as tech stocks, then it’s good to again come back to the core question. Why did you invest in these stocks in the first place? Did you plan to stick with it for five to ten years when you bought it? Has the business case changed, are they facing challenges that you didn’t know about when you bought in?

It’s not pleasant to watch your investments go down in value, but don’t forget that these dips are part of what makes you money in the long term. They’re worth less now, which also means if you’re buying, that you’re able to buy more for the same amount of money.

As long as you’re following a long-term plan, and investing in widely diversified funds, you’ll be able to buy more and then wait a few years for the values to bounce back. That’s part of how you make money. The trick is that, hopefully, the businesses you bought into don’t collapse in the meantime. This is why the strategy of funds is a good one.

I hope you find this reassuring. It’s a question that is on a lot of people’s minds at the moment, because we’re facing some of the worst market turmoil in years. It will be a big test of mental strength for those who have just started investing! 

I’ve had a lot of people sending me questions about it, so I focused on the issue for the latest Cooking the Books podcast. Listen to “how to shield your investments from a chaotic year ahead” to get even more info on this subject:

Send questions to [email protected] if you want to be featured in the column. Emails should be about 200 words, and we won't publish your name. Unfortunately, Frances is not able to respond to every email received, or offer individual financial advice. 

Information in this column is general in nature, and should not be taken as individual financial advice. Frances Cook and BusinessDesk are not responsible for any loss a reader may suffer.