Investors, keep calm and move on


Leighton Baker: ‘It’s encouraging that most investors haven’t let go of the panic button.’

Leighton Roberts is the co-CEO and founder of Shares.

Rai: Are we there yet? No. Have we encountered some bumps ahead? Yes. Shall we stop for the ride? He’s investing!

Market volatility has become the norm as the world economy takes a hammer and scuffle with a complex web of events including Covid-19, the war in Ukraine and rising inflation. Our financial confidence is being tested.

The narrative is now “Are we heading for a recession?” ‘s debate.

US GDP data released this week shows negative growth for the second quarter, but economists are waiting for indicators such as income, spending and employment to decide whether the country is in recession.

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It’s encouraging to see that most investors locally haven’t succumbed to the panic button — which isn’t easy when portfolios start showing more red than green. Most are riding this bicycle—a first experience for many that can be hard to navigate, so here are a few things to keep in mind.

Finance and Expenditure Committee

Reserve Bank Governor Adrian Orr discussed recession risks in May.

Market reset fears

The first thing to remember is that it’s natural for markets to have ups and downs – these give us the opportunity to see higher growth returns over time. Markets work in cycles, we should expect this recession to end, because it will happen.

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Large, international markets are more familiar with these cycles, and are rapidly positioned to bounce back. But in New Zealand, even a short period of pause has had a long-lasting effect.

But don’t be alarmed – if we enter a recession it will be more of a slow-burn than a sudden shock and there’s a good chance we’ll find it shallow compared to other countries given our country’s low unemployment and strong balance sheet. Feel the scale. ,


The lessons of history tell us not to panic.

We know it’s tough, but we encourage you to make the most of this period by considering: Don’t make any panic changes to your KiwiServer risk profile, take whatever steps you can to protect your earnings You may, reconsider how you are dealing with existing debt and avoid closing in on losses if you need to take on more – your portfolio may be down, but the last resort is to withdraw, depending on your circumstances. To make the right investments, to time the market with the time in the market.

The investment is for the long term and should be done regularly in your own portfolio and the accounts of your children.

lessons from history

We must also learn from the past and avoid becoming the second generation that invests only when the market is hot.

Given the behavior of investors after the stock market crash of 1987, many who took advantage of their homes to invest in stocks burned out, then naturally feared to re-invest in the stock market. As a result, the kiwi missed out on gains that other countries had on the back of a major period of global growth, including the global financial crisis.

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looking ahead

Today, the average investor on stocks has a portfolio of about $4,000, spread across multiple exchange-traded funds and individual companies. This is a better place to make the most of a downturn.

A recent Shares Investor survey also showed that 85% of people are calmer and over-buying during this time, while 90% say they are investing for the long term, so the investment horizon may be in decades. It’s encouraging to see Kiwis thinking.

While things are turbulent now-preparing, sticking to our long-term goals and staying calm will help us establish ourselves as a nation to strengthen the other side.

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