Kiwisaver investors told to ‘hang in’

Kiwisaver investors are being urged not to panic after sharp falls on world sharemarkets.

After dropping a hefty 3.65 per cent on Thursday, the NZX 50 Index closed up 1.4 per cent yesterday at 8843 points. The index started the week at 9214.

On Wall Street overnight on Thursday, tensions over trade wars and politics pushed the Dow Jones industrial average down 2.1 per cent and the benchmark S&P 500 fell 2.1 per cent.

But John Berry, chief executive of Pathfinder Asset Management, said investors should not be too concerned, as world fundamentals such as corporate earnings were still strong and banks were in much better shape than they were nine years ago. ‘‘We’re still cautiously optimistic,’’ he said.

Many Kiwisaver funds are invested in markets overseas. But Berry urged Kiwisavers not to fear.

‘‘If you’re ... contributing out of your salary every month, markets go up and down and you have to accept that. And every time a market goes down and your salary’s invested in Kiwisaver, you’ve just bought stuff cheaper than it was a month ago.’’

Retirement Commissioner Diane Maxwell repeated Berry’s words, urging people not to mess with their Kiwisaver funds as the effects of the fall ripple through to their returns.

‘‘Like all long-term investments, your Kiwisaver balance will go up and down as the market fluctuates, but hang in there and you will gain in the long run.’’

–Stuff