It's not a good idea to look at your KiwiSaver balance every day at the moment. Photo / File
It's not a good idea to look at your KiwiSaver balance every day at the moment. Photo / File
It's hard to settle to anything at the moment.
Our lives are filled with talk and images of Covid-19. The effects it's already having on our lives is just surreal.
It is such a fluid situation — you really don't know what's going to happen from one day to thenext. Supermarket shelves are emptying, people look sideways at you if you cough or sneeze, people are being told to work from home, stay away from crowds and social distance themselves.
It can be frightening if you let it overwhelm you.
The economic plan announced yesterday will help thousands of people. Will it be enough? Who knows.
Only time will tell us. The good news is that we only have 11 known cases of the virus in New Zealand and no new cases in the past few days.
Of course that doesn't mean there are not people walking around in our communities with it, hence the need to cancel gatherings with more than 500 people.
Events have been cancelled all over the region in the past few days. It might seem 'over the top' to some but I think the more we do to contain it in our region the better for all of us. Which also means the quicker our region will recover.
Linda Hall, Assistant Editor, Hawke's Bay Today.
The other thing I have been hearing a lot of talk about is KiwiSaver. It's not nice watching your nest egg disappear before your eyes. So I asked Shelley Hanna, who is an Authorised Financial Adviser FSP12241 and writes our weekly KiwiSaver column, some questions.
Q. Is there anything people can do to stop their KiwiSaver plummeting?
A. There is nothing investors can do to slow or stop the rate at which it is falling. Active fund managers have strategies to deal with volatility, while passive managers generally leave it to the market to work itself out.
Q. Is there a base point at which no more money can be lost?
A. No, there is no such 'base point'. Having said that, KiwiSaver fund managers are required by the Financial Markets Authority to 'stress test' their portfolios against possible negative events. Stress testing is a simulation-based tool that puts "stress scenarios" on a portfolio (or bank, or business) to see how it reacts in that given situation. Fund managers diversify widely across asset classes, sectors and regions to reduce risk.
Q. If you have your KiwiSaver in high risk should you change it or is it too late?
A. It is human to panic when faced with the unknown. If someone is in a high risk fund, they have made that decision for themselves at some point. Switching to lower risk now will lock in the losses.
A. Looking at your balance every day is not a good idea. Members can increase their level of contribution while markets are down, if they can afford to. But if they are worried about their job or debts then it would be better to put any extra money into an emergency cash fund. If you have time on your hands, use it to get to know your KiwiSaver. Read the messages from your provider and find out how they are dealing with the situation. There may be podcasts or video updates you can listen to on their website. Knowing what is in your KiwiSaver and how it works will give you confidence.
Thanks Shelley for your advice.
We Kiwis are pretty tough. We will get through this. Be kind to yourself and your neighbours and enjoy spending some time at home. Now is the perfect time to take up a new hobby.
If you can knit, crochet, service your lawnmower, read music, play an instrument, bake a cake, to bowl leg spin, change a tyre on your car or iron clothes teach your children or your grandchildren.
Linda Hall is assistant editor of Hawke's Bay Today.
