“Like all long-term investments, your KiwiSaver balance will go up and down as the market fluctuates. But hang in there and you will gain in the long run,” says Maxwell.

Avoid being tempted to change funds. If you move to a more conservative fund during a market fall, you risk locking in those losses, and limit your chances of recovering.

Several factors led to mid-October’s drop in the US markets, which dragged down the New Zealand stock exchange (NZX).

Among the triggers were:

· Rising US interest rates, which have been worrying investors.

· Fears the higher price of oil may affect business profits.

· There’s concern about where China’s economy is heading.

· The International Monetary Fund has warned of ‘dangerous undercurrents’ that threatened the world economy.

“The best thing to do is sit tight, ride out the low patches and know that when the market rises again, so will your balance,” says Maxwell.

It’s common to get excited watching your KiwiSaver balance grow, if it’s easy to access.

“The downside is that we may be watching it too closely. KiwiSaver is a long game that will have bumpy patches, but will pay off in the end, and make a huge difference to your retirement,” says Maxwell.

First published 17 October 2018

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.