News on markets, tariffs and geopolitics
Lately, news around the world has been dominated by tariffs and geopolitics (the power relationships between nations). Here at home, the media has started questioning what this might mean for our investments, including KiwiSaver balances, as markets adjust.
Understanding the impact: your questions answered
What are tariffs and how do they affect the market?
Tariffs are taxes on imported goods, which can make those goods more expensive. While tariffs can protect local businesses, they can also lead to higher priced goods for consumers and potentially slower economic growth. It's important to remember that market ups and downs are a natural part of any investment journey. History has shown us that over time markets can and often do recover1.
How can you navigate news about tariffs and geopolitical risks?
It's natural to feel concerned about market ups and downs caused by tariffs and geopolitical risks. However, over the long term, short-term market movements are to be expected and it's important to stay focused on your long-term investment goals. Our diversified investment approach is designed to ride out these market conditions. In fact, AMP diversified funds ended 2024 with returns well above long-term expectations, providing a solid foundation for your investments. If you have concerns, we recommend discussing them with a financial adviser to ensure your strategy aligns with your long-term goals. If you need help, please contact the team at AMP team and we can connect you with your adviser.
Why is diversification important, especially when markets are up and down?
When it comes to investing, one of the key strategies to manage market ups and downs is through diversification. By spreading your investments across a wide range of assets, industries, and countries you reduce the impact of any single company’s or sector’s performance. One of the many benefits of investing with AMP is that your money is typically invested in a wide range of assets, sectors and markets all around the world. Our AMP diversified funds aim to help you withstand market ups and downs and seek stable long-term returns while allowing you to benefit from growth in different sectors and regions.
What are some common considerations when deciding whether to maintain or adjust contributions to investment accounts like KiwiSaver during periods of market volatility?
It's understandable to feel concerned during market ups and downs, especially when you see the value of your existing investments potentially falling. Predicting market highs and lows is impossible. That’s why maintaining regular contributions to investment accounts like KiwiSaver or managed funds can be beneficial. Regularly investing, also known as dollar-cost averaging, means you buy units or shares regardless of when prices are high or low. This aims to help smooth out the potential impact of market ups and downs. This may improve your long-term returns as investments bought at lower prices tend to gain value when markets recover.
We're here to help
We understand that navigating market uncertainties can be challenging. Remember, staying calm and focused on your long-term goals is key to navigating any market ups and downs. To stay updated with our latest insights as they evolve, keep an eye on our website for updates from our investment team and tune in to the upcoming 'Making Cents' podcast episode out soon, featuring Frances Cook and Aaron Klee, AMP General Manager Investment Management & Services. Because everyone's needs are different, you should always seek financial advice or other professional advice relevant to your personal financial situation. For financial advice, we recommend you contact your Adviser. If you don’t have an Adviser, contact us on 0800 267 5494 or find an adviser online.
Recommended reads
What is market volatility? A complete guide
In this guide we'll explore market volatility: what it is, why it happens, and how to invest through it. Learn more >
The basics of diversifying investments
Get up to speed on one of the key strategies to balance risk and reward in your investment portfolio. Learn more >
Dollar-cost averaging, explained
Dollar cost averaging sounds technical, but as far as investment strategies go, it’s one of the simpler ones! Learn more >
The information included in this communication is of a general nature and does not constitute financial or other professional advice. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances.