8 common investment myths busted

Last updated 26 June 2026

MAS Head of Investment, Dan Mead, clears up some common misconceptions about investing. 

There are many myths that surround what can sometimes be seen as the mysterious world of investing. To help set the record straight, MAS Head of Investment Dan Mead shares the truth behind some of these misunderstandings. 

Myth 1: You need to be wealthy before you can start investing

You don’t actually need a lot of money to get started. In fact, you only need $500 to open a MAS Investment Funds account, so you can really start at any age or stage. You do need to be over the age of 18 to open a MAS Investment Funds account in your own name, but parents or guardians can open one on behalf of their kids at any time to get them started. 

Myth 2: Investing is just too risky

People often think that share markets are scary and worry that they could end up losing all their money. While this is true in very rare situations, it typically only occurs if you put all your investments into just one or just a handful of companies or bonds, and those investments completely fail or default. The time invested also matters – you have a higher possibility of losing money if you only invest in the share market over a short period. Investing is a long-term proposition. 

However, if you diversify your investments, which means you spread your money across different asset classes, countries, industries and companies, then the odds of losing everything lowers substantially. MAS funds are diversified in this way.

Myth 3: It’s better and safer to keep money in the bank

On the one hand, yes, when you have money in a bank account it won’t experience the sudden ups and downs that other investments might. However, while it avoids those risks, it doesn’t protect you from inflation. Inflation is when the cost of everyday goods and services goes up over time, meaning your money buys less than it used to. So, if the interest rate your bank pays you is lower than the rate of inflation, your money is actually losing its buying power.  

Myth 4: You should always buy in the dip

It can be good to buy in the dip – if you know when the dip is. That’s the tricky part! A better approach is to just keep investing regular amounts of money regardless of what the market is doing, which is called dollar-cost averaging. That way, you’re not trying to guess the best time to buy and you’re guaranteed to buy in the dip sometimes. 

Myth 5: You need to de-risk when the markets are volatile 

It’s important to have your long-term goals in mind and not get swayed by volatility. Sometimes the best days for growth in the market happen right after a big drop. If you get worried during a downturn and pull your money out, or switch to a low-risk fund, you might miss those crucial ‘best days’ when the market bounces back, and that can have a huge impact on your money. 

It’s all about staying in the market and not looking at your investments daily, because that’s when you might do something that goes against your long-term investment goals. It’s best to be on autopilot and set up regular payments that go into your savings so you don’t have to think about it. 

Myth 6: High risk means higher returns

This is not necessarily always the case. It’s generally expected that you’ll get high returns, but it depends on the specific time period and type of investment as to whether that’s the case. Just look at what has happened to bitcoin recently

Myth 7: Past returns predict future returns

This is not true. That’s why you’ll often see a disclaimer at the end of investment advertisements where fund managers are required to state that ‘past performance is not an indicator of future performance’. 

The reason for this is that markets are always changing, therefore investors move their focus to different types of companies, industries or investment strategies over time. Sometimes a few big companies or specific sectors might lead the market for a while, but this leadership doesn’t last forever. 

Myth 8: All KiwiSaver scheme funds are the same 

In the first instance, I’d say that the most important thing is that you’ve joined KiwiSaver. It’s good for your long-term financial security and your future self is going to thank you for it. There are, however, some differences between funds and you should understand what those differences are before investing.  

Some KiwiSaver scheme funds are passively managed, so they aim to match the market’s performance, not beat it. They usually have lower fees but they may not generate the same after fees returns as actively managed funds. Then there are also different asset allocations among different providers, i.e. how your money is spread across different types of investment sectors, like company shares, property or cash. It’s good to understand what you’re investing into; consider speaking to a MAS Adviser so they can help you make the right choice.

Whether you’re planning for retirement or growing your wealth, MAS is here to support your financial goals so you can build a future you feel confident about. If you would like to chat with a MAS Adviser about our investment options, call us on 0800 800 627 or email info@mas.co.nz.