Managing market volatility

March 2025

You may have noticed recent declines in your investments. Financial markets have experienced significant fluctuations, with major share market indices seeing sharp drops. This instability is being driven by a mix of global events, including US trade policies, geopolitical tensions, inflation concerns, interest rate uncertainty, and slowing economic growth in the US. 

While this may feel like the perfect storm, periods of volatility are a normal part of long-term investing. 

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.

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.

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.

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

We have a large team of investment professionals here in New Zealand 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.

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.