It’s been a rough start to the year for global share markets, as they reflect concerns that central banks are reducing monetary stimulus at a time when the outlook for economic growth is slowing. This is compounded with concerns over geopolitical tensions centred in eastern Europe.
Market volatility like this can test even the most confident investors and may leave you feeling uneasy or concerned about your KiwiSaver savings. So it's important to remember in times like this that it’s normal for markets to go up and down, and that KiwiSaver is a long-term investment.
Most of us won’t touch our KiwiSaver balance until we are 65 years old, and while we know it can be hard to see your balance go down, history shows that sticking with your plan and staying invested through the ups and downs delivers a better outcome at retirement.
Click here to see graphs showing our fund performance since they started. They’ve weathered many short-term market dips, but overall they’ve trended upwards.
Should I be worried if my KiwiSaver balance has dropped?
Remember your KiwiSaver is an investment – not a bank account. Just as the markets rise and fall, so does your investment. This is a normal part of investing. By continuing to contribute at this time, you are buying more assets at a lower price and will benefit when markets recover. While seeing your balance go down can be unsettling, we recommend staying with your long-term KiwiSaver plan.
Your Generate Online account can be both a help and hinder at this time, as it provides good visibility of your KiwiSaver investment. The downside of this is the temptation to check your investments too regularly and react to changes in value – remember KiwiSaver is a long-term investment.
Should I switch funds if my KiwiSaver balance goes down?
KiwiSaver is a long-term investment and we do not recommend that you try and time the markets by moving between conservative and growth funds. Research shows that trying to time markets does not work. We recommend the Conservative Fund for those members who are planning to make a withdrawal in the next three years (First home, retirement etc). Read more about this here.
Get in touch if you’d like to talk through your options.
Should I invest more in my KiwiSaver account?
We can’t tell you when to invest, but we can recommend that when if you do decide to invest, do so with a long-term mindset. As the old saying goes “time in the market is more important than timing the market.”
See how to make payments to your KiwiSaver account here.
You may like to get financial advice before making further investments into your KiwiSaver account or use our KiwiSaver calculator to see how additional voluntary deposits could impact your KiwiSaver balance in the long run.