OPINION
1. Don’t panic. It’s probably not going to be as bad as all those screaming headlines suggest. This market correction is not unexpected. Everyone could see the tech bubble building. We knew investors would reposition for a more subdued United States economy and a lower interest rate world. Unfortunately, selling off tends to happen a lot faster than buying up. These transitions rarely happen in an orderly fashion. Actually, they never do!
2. Remember rule number one: Even if things spiral and this sell-off starts to look like a serious crash, still don’t panic. Panicking never helps. This is not a repeat of the GFC. Major banks aren’t faltering, and the gears of the financial system aren’t seizing up. This is not 1987. Nearly 40 years on we still don’t really know why that one happened. We know what is happening now. This is not the tech wreck of 2000 ... Well, okay. There are aspects of that one in the AI bubble. But remember rule number one.
3. Don’t look at your KiwiSaver balance. It will be ugly. But remember the number you saw on your account last week was an illusion. Wall Street had been on a stellar run this year (until last Friday), propped up by the tech hype driving shares like AI chip maker Nvidia. That was flattering your savings. The number you’d see today is also hypothetical.