Managing market volatility

When uncertainty hits and markets fall, we know it’s hard to sit and watch your account balance go down. Here are some tips to help you get through these challenging times.

Instinct might tell you to switch into a ‘safer’ investment option when markets get the jitters. But if we look back on previous market events, it’s clear that having patience is the best strategy in unsettling times.

Stay the course

When markets fell in 2020 on the back of COVID-19 concerns, we saw a lot of investors switch out of growth-oriented funds into more conservative ones. It meant that many missed out on the rebound in markets that followed.

The moral of the story is stay the course. Do nothing – and be prepared to ride out the bumps. It’s hard to predict when markets will change direction, and trying to pick the best times to change funds comes with risk.

Nevertheless, it’s important to check you’re invested in the right fund for your circumstances, especially if you’re intending to use your money to purchase a first home or you need it soon.

Know that all your eggs are not in the same basket

In the investment world we call this diversification, and it protects your investments from the ups and downs we expect from time to time. The logic is simple; invest in things that do not move in the same direction, at the same time or at the same pace to lower your investment risk.

The majority of ANZ-managed KiwiSaver schemes and investment funds are well-diversified, meaning they hold different types of investments such as shares, bonds, cash, property and infrastructure. It means that falls in one market have a greater chance of being offset by gains in another.

Trust the experts

Markets are unpredictable, and are driven by both emotions as well as financial and economic factors. At ANZ Investments, we believe maintaining a good investment discipline is the best way to deal with financial market uncertainty.

We have a team of over 20 investment professionals here in New Zealand, and it means we’re always looking out for your investments – we don’t just take a ‘set and forget’ approach. It also means we can move quickly to make the most of any new investment opportunities that may present themselves.

Focus on what you can control

Market falls are part and parcel of investing, so it’s best to focus on what you can control. The headlines can be full of doom and gloom, and markets can remain turbulent for some time.

At ANZ Investments, we believe staying focused on long-term goals is more important than ever. If you can, continue making regular contributions into your investment account. Investing through a market downturn often means we can pick up quality investments at lower prices.

And finally, remember to regularly check that you’re invested in the right fund for your life stage and investment objectives.

See which fund might be right for you

Spending a few minutes now to choose the right fund for your life stage can make a huge difference to the amount you have to withdraw. Find the fund that may suit you best – whether you’re saving for a first home or retirement.

Tailored investment advice

The future is bright when you feel confident about your investment choices. If you need help choosing the right investment option for you, talk to your financial adviser. If you don’t have a financial adviser, we can put you in touch with an ANZ Investment Adviser on 0800 736 034. See ANZ’s financial advice provider disclosure.

Important information

This information is issued by ANZ New Zealand Investments Limited (ANZ Investments). The information is current as at 31 December 2021, 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.

We recommend seeking financial advice about your situation and goals before getting a financial product.

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 & conditions. Download a copy of the guide and product disclosure statement.