1. There's no need to panic
Seeing your balance fluctuate can create understandable concern. Market volatility - ups and downs in investment values - is a normal part of investing. Changing funds when the market temporarily dips can be a bad idea because you'll lock in any loss in value. History shows that, over time, share markets recover from falls.
2. Stay focused on your long-term goals
If you don't need to access your KiwiSaver investment anytime soon, it's important not to react to short-term events. Generally, the closer you get to using the money in your KiwiSaver account or other investments, the lower the risk you should be taking. This is to protect against potential losses as the need for stability in your balance increases.
3. Temporary dips can actually be good news
Continuing to contribute money to your investments when the market dips could have a positive long-term impact. This is because you are buying units at a lower price, so every dollar is buying more units in your investment than prior to the dip. Over time as the market recovers, these bargain buys can potentially turbo-charge your overall returns.
What is market volatility?
Market volatility refers to ups and downs in investment values. From time to time, we will see periods of heightened movements in value, often driven by economic, geopolitical or other market events. What this typically means for things like your KiwiSaver savings or other investment products (like Investment Funds and direct shares), is that day to day balances can move up or down more than usual. While this may put short-term pressure on your balance, it's important to remember that volatility is a normal part of investing.
How does market volatility impact my KiwiSaver or Investment Funds accounts?
When you invest in a managed fund like KiwiSaver or Investment Funds, your contributions are used to buy "units" in your selected fund. These units represent your share of the fund, which is made up of a mix of assets - growth assets and income assets. While the number of units you own does not change during periods of volatility, the value of each unit may fluctuate more than usual. Think of it like owning a share in a property – the property's value may rise or fall, but your share of ownership remains the same.
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News and views
Monthly Wrap Up
Tariffs, rapidly changing geopolitics, and weak consumer sentiment made it harder to forecast the pace of company earnings growth and the right level of interest rates in March. Uncertain markets demonstrate the importance of having a well-diversified portfolio, which is central to how we manage your money at ASB - this has at least cushioned the blow from the tough start to the year.
Read more in the March Wrap Up.
Quarterly Economic Forecasts
- NZ is starting to work its way out of what proved to be a sharp and deep recession in 2024, after the delayed effects of high interest rates hit hard
- Growth resumed at the end of 2024, aided by strength in exports
- Economic recovery is set to be gradual over 2025
Read more in our latest Quarterly Economic Forecasts report.
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Interests in the ASB KiwiSaver Scheme and ASB Investment Funds (Schemes) are issued by ASB Group Investments Limited, a wholly owned subsidiary of ASB Bank Limited (ASB). ASB provides administration and distribution services for the Schemes. No person guarantees interests in the Schemes. Interests in the Schemes are not deposits or other liabilities of ASB. They are subject to investment risk, including possible loss of income and principal invested. For more information see the ASB KiwiSaver Scheme Product Disclosure Statement or the ASB Investment Funds Product Disclosure Statement available from this website and the register of offers of financial products at www.disclose-register.companiesoffice.govt.nz (search for ASB).