Right now, financial markets around the world and in New Zealand are experiencing some turbulent ups and downs due to a mix of factors.
New tariffs on goods, recent economic reports, and comments from central banks are all adding to the volatility. On top of that, some company profits haven’t been as strong as expected, and global events—including the wars in Ukraine and the Middle East, and the reaction from European countries and the US—are influencing investor confidence.
While this might feel unsettling, it’s important to remember that market volatility is a normal part of investing. Markets often rise and fall in value, but history shows that they recover and grow in the long run. We recommend staying the course and not reacting to these fluctuations—instead, focus on the long-term potential of your investment and wait for markets to return to growth. But at the end of the day, it is your money. If you are concerned, we have a team of advisers who would be happy to talk with you.
Market Volatility Is Normal
Markets move in cycles, and history shows that after periods of decline, they tend to recover over time. Short-term fluctuations can be unsettling, but they are a normal part of long-term investing.
If you react to temporary dips by switching funds or withdrawing investments during market volatility, you risk ‘locking in losses’ and missing out on future growth when markets recover. Staying the course is often the best approach.
Why Staying Invested Matters
Trying to time the market—jumping in and out based on short-term movements—can be risky. No one can predict exactly when markets will rebound, and missing just a few of the best-performing days can significantly impact long-term returns.
Instead of focusing on daily news headlines, it’s important to align your KiwiSaver investment with your long-term financial goals and risk tolerance. A well-diversified investment strategy is designed to weather market ups and downs over time.
What Should You Do?
- Stick with your plan – If you are not intending to withdraw your KiwiSaver funds for some time, staying in your current fund and riding out volatility is usually the best move.
Avoid making decisions based on fear – Emotional reactions can lead to impulsive choices that may not be in your best financial interest.
Talk to a Generate adviser – If you're feeling unsure about your investment strategy or want to review your fund selection, our team is here to help.
Final Thoughts
Market fluctuations can be concerning, but they are a normal part of investing. Staying invested and focused on the long term is key to making the most of your KiwiSaver savings. If you have any concerns or questions, don’t hesitate to reach out to a Generate adviser before making any changes.
Stay steady, stay invested, and let time do the work.