Ki­wiSavers told to ‘hang in’ amid mar­ket volatil­ity

The Southland Times - - Business - Cather­ine Har­ris and Su­san Ed­munds

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, whose firm does not in­vest in New Zealand shares or hold a Ki­wiSaver fund, urged Ki­wiSavers not to fear.

‘‘If you’re a long-term in­vestor and 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.’’

Maxwell, who heads the Com­mis­sion for Fi­nan­cial Ca­pa­bil­ity, said when­ever there’s a dip on the share­mar­ket she is asked whether Ki­wiSavers should change funds or sus­pend their con­tri­bu­tions.

‘‘The best thing to do is sit tight, ride out the low patches and know that when the mar­ket rises again, so will your bal­ance. Ki­wiSaver is a long game.’’

Diane Maxwell

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