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I’ve fielded a number of calls in recent weeks from clients who are concerned about the current market turmoil. There’s no doubt that 2022 from an investment perspective has not gone well – with double-digit negative returns since the start of the year. With an almost incessant barrage of negative economic news and increasing geopolitical turmoil and unrest, its hard to see any positives on the horizon. The thing is – the markets have reacted accordingly and the downturn reflects the market’s assessment of the current outlook. Does that mean that it will get better from hear on in? No – but, neither does it mean it will get worse – the markets will do what the the markets do – respond to price signals.
What does that mean for your KiwiSaver or other investments? Should you make any changes?
Our advice is always to consider the goals you have for your KiwiSaver/Investment and ask yourself two questions –
- have the goals for your KiwiSaver or Investment changed since the beginning of the year? and,
- Have your time horizons changed?
If the answer to either of these questions is “Yes” (or “possibly) – please get in touch so we can help you determine whether any changes are appropriate. If you answered No to both questions – then sit tight – it could be a bit of a bumpy ride but by focussing on the long term (signal) as opposed to current market turmoil (noise), you will be able to take advantage of the recovery when it comes around.
- The worst years ever in the stock market – insights on stock market downturns over the last 100+ years from one of our favorite investment bloggers, Ben Carlson
- The best investment strategy for this market – this article also by Ben Carlson, contains a fascinating graph showing the value of dollar cost averaging – particularly in a bear market!!
- Things that matter – a sketch to remind us where we need to focus our attention
- Current reality – another sketch from the investment sketch master, Carl Richards.