The benefits of a long-term approach to investing

At ANZ Investments, one of our fundamental beliefs is that long-term investing outperforms short-term investing. Here we explain why – and how taking a long-term view can deliver better results from your investments. 

Managing market ups and downs

Markets are always changing. Over the short term, investment markets can fluctuate in response to world events, economic trends, changing investor sentiment and a range of other factors. 

Sometimes, those fluctuations can be dramatic and unpredictable – for example the huge market swings at the start of the COVID-19 pandemic due to uncertainty about how the pandemic would play out. The 2007/08 Global Financial Crisis is another example. 

Events like these are impossible to predict. But history shows that there are short-term blips – and over the long term, generally markets rise. 

The graph below shows the return on a $10,000 investment across three OneAnswer KiwiSaver Scheme funds since its inception in 2007. It also shows some of the major events in New Zealand and around the world during that period. 

The line graph shows the trend of a $10,000 KiwiSaver investment since its inception, across three OneAnswer KiwiSaver Scheme funds; Conservative, Balanced and Growth.

The X axis shows the dollar value in $5,000 increments from $0 to $35,000.

The Y axis shows the years since inception of KiwiSaver, from 2007 to 2022.

The Conservative fund line shows the growth of a $10,000 investment over the period from 30 September 2007 to 31 May 2022 to $20,007 (after fees and before tax).

The Balanced fund line shows the growth of a $10,000 investment over the period of 30 September 2007 to 31 May 2022 to $24,096 (after fees and before tax).

The Growth fund line shows the growth of a $10,000 investment over the period of 30 September 2007 to 31 May 2022 to $25,999 (after fees and before tax).

The first vertical dash line in 2008 represents the Global Financial Crisis.

The second vertical dash line in 2011 represents the European debt crisis.

The third vertical dash line in 2020 represents the COVID-19 pandemic.

The fourth vertical dash line in 2022 represents inflation concerns and the conflict in Ukraine.

*Graph shows the amount without Government, employer or employee contributions. Returns are after fees before tax.

Despite significant short-term blips following events like the Global Financial Crisis and the COVID-19 pandemic, investing for the long term allows you to balance out short-term ups and downs - and benefit from when the market rebounds. 

Investment discipline

As humans, we don’t always act logically, and investors are no different. Sometimes they are driven by emotions rather than facts. For example, investors following the crowd into complex investments they didn’t really understand was one of the main causes of the Global Financial Crisis.  

That tendency towards ‘herd’ behaviour often causes investors to over-react to short-term events, by selling investments when the price drops (because lots of other people are), and missing out when the price rebounds. It can also lead to the reverse – buying investments when they’re popular and the price is high, when most of the gains have already been made.

ANZ’s long-term approach is underpinned by a rigorous, highly disciplined process which helps avoid these pitfalls. Our long-term horizon means we can take a more balanced view of the constant ‘noise’ in markets, and stay focused on long-term trends.

Balancing risk and reward

Any investment comes with risk – some bigger than others. While you can’t avoid risk, what really matters is how you manage it.

Our goal is to deliver a strong performance, over time. One stellar year means nothing if those gains are lost the next year. We carefully assess the balance of risk and returns, and the long-term potential, when considering any investment. That’s why our focussed long-term investment approach has delivered strong returns over the long run.

Important information

This information is issued by ANZ New Zealand Investments Limited (ANZ Investments). The information is current as at 31 May 2022, and is subject to change. This material is for information purposes only. Although all the information in this article is obtained in good faith from sources believed to be reliable, no representation of warranty, express or implied is made as to its accuracy or completeness. To the extent permitted by law ANZ Investments does not accept any responsibility or liability arising from your use of this information.

ANZ Investments is the issuer and manager of the OneAnswer KiwiSaver Scheme, OneAnswer Multi-Asset-Class Funds and OneAnswer Single-Asset-Class Funds. 

Important information is available under terms and conditions. Download the guide and product disclosure statement.

Past performance does not indicate future performance. The actual performance any given investor realises will depend on many things, is not guaranteed and may be negative as well as positive.

We recommend seeking financial advice about your situation and goals before getting a financial product. Please talk to ANZ by calling 0800 736 034, or for more information about ANZ’s financial advice service or to view ANZ’s financial advice provider disclosure statement see