Managing through ups and downs: Q&A

1. What's happening in the market?

Hear from Aaron Klee, General Manager of AMP Investment Management and Services, as he explains what's happening in the market.

2. How are AMP funds positioned to handle market ups and downs?

A core principle of our investment philosophy is diversification. The majority of our members are invested in diversified funds, which means your money is spread across a range of different assets like shares, bonds, and infrastructure. We regularly manage this mix and review it to ensure it's positioned appropriately. Over recent years, we've been increasing the level of diversification within our funds to provide greater resilience during periods of market ups and downs. This broad approach can help to cushion the impact of any single market event. 

3. My balance has gone down what do I do?

Seeing your balance dip can be unsettling. As our experts discussed, short-term market ups and downs are expected when investing for the long term. History shows us that markets typically recover over time. It's important to focus on your long-term goals and avoid making reactive decisions.  Making reactive decisions based on short-term market movements can often lead to poorer long-term outcomes. Remember, for most of us, KiwiSaver is a long-term investment, and "time in the market" is generally more beneficial than trying to "time" the market. 

Check you’re in the right fund, review your investment timeframe and risk tolerance. If you're concerned, we encourage you to reach out to your adviser for guidance

4. What should I do as I approach or enter retirement?

If you're nearing or in retirement stick to your plan. Avoid suddenly make big changes based on short-term market movements. If you don't have a plan, it may be time to get some advice and create one for your retirement.  It's important to remember that even in retirement, you'll likely have a long time horizon, and there's still potential for your investments to recover from market ups and downs. Your plan should be tailored to your specific needs and timeframe.

5. When is the right time to talk to an adviser?

Connecting with a financial advisor can be beneficial at various times throughout your investment journey. Whether you're unsure if your current investment portfolio aligns with your individual circumstances, risk tolerance, and long-term financial goals, or as you approach key life stages like purchasing your first home and retirement and want to create or review your financial plan, talking to a financial adviser can be helpful.

To talk to an adviser request an appointment and we'll be in touch. 

6. With the market ups and downs, should I stop investing?

It's understandable to consider pausing your contributions to your investments during market ups and downs. However, market downturns can present an opportunity for long-term investors. By continuing to invest, you're potentially buying assets at a lower price. The principle of "time in the market" is key, and consistently contributing through market cycles is often a more effective strategy than trying to stop and start your contributions based on short-term movements. 

7. With the current market ups and downs should I switch to a more conservative fund right now?

While it might be tempting to consider a more conservative fund during market uncertainty, this decision really depends on your individual circumstances, time horizon, and risk tolerance. Reacting to short-term market movements by switching funds might not align with your overall long-term investment strategy and could potentially mean missing out on future market recoveries. We recommend speaking with your adviser before making any changes to your funds to discuss your specific situation and work out the most appropriate fund/s for you. 

8. What should I do if I'm buying a house right now and want to use my KiwiSaver account for the deposit?

This is a significant decision, and the impact of recent market ups and downs on your KiwiSaver balance is understandable. If you haven't already, we recommend getting in touch with your adviser as soon as possible to discuss your specific situation. They can help you understand the current value of your KiwiSaver account, the potential implications of withdrawing funds at this time, and discuss any strategies or considerations relevant to your house purchase timeline. Get our top tips and resources for your first home journey here