Coronavirus Commotion
At the moment, it’s impossible to go a day without hearing something about the coronavirus; it’s everywhere! It is not just impacting our health, but also how we work, socialise and consume. And it doesn’t stop there; financial markets and even the environment are also caught up in the effects of COVID-19.
Along with the information comes the self-accredited know it alls. As the financial markets dip, all of a sudden everyone is a KiwiSaver expert telling you to wait it out, sell up, buy out, time the markets, switch schemes or just put all your money in the bank.
This combined ‘noise’ paints a rather bleak picture for the future and this can be very overwhelming. It can cause even the most educated financial experts to question their investment decisions and what they think they know. So what is the best thing to do during these remarkable times?
It’s Simple: Tune It Out
Our advice is to try ignore the media hype and scaremongering tactics used to frighten people into making bad KiwiSaver investment decisions. Reacting to all this ‘market noise’ could potentially put you in a worse spot than where you would have been if you had just held your position. You never know, the day you pull out of your position could be followed by the best day on record. You’ve got to be in it to win it.
If you are in the right fund which is suited to your goals, volatility capacity and volatility tolerance, you have no need to worry. While the markets have fallen, historically bear markets are where we see the biggest gains. KiwiSaver is not a short-term investment so unless you plan on retiring soon or buying your first home, the current market volatility isn’t that important. Tune out all this market hype; you’ve got time to ride it out.
If you are unsure whether you have made the right KiwiSaver investment decision, talk to a qualified financial advisor. Here at National Capital, we can give you personalised advice tailored to your situation.
Control What You Can
We can’t control everything that is going on in the world right now which is unsettling. However what we can control as KiwiSaver investors is the type of fund and who it is invested with.
Once you’re in the right fund, leave it to the experts! KiwiSaver fund managers are professionals who are in charge of millions of dollars. They are familiar with the markets and are able to make well informed investment decisions. It’s their job to invest in order to generate returns - that’s why we pay them!
Amid the COVID-19 crisis, it can be tempting to want to check your KiwiSaver balance every day to see how much it has changed. But this will only add to your money worries.
Tune out the market noise, it’s not helping.
