It seems that every day another expert is predicting a financial crash will hit some time soon.

As sharemarkets continue to rise the view is that they can only go so far before coming back down.

Read more: The ticking time bomb that could blow into a financial crisis

But what would you do if you if sharemarkets dropped and your KiwiSaver balance began to fall?


The Financial Markets Authority has released a quiz to help people test their reactions and help educate people on what to do as part of Money Week - a national week aimed at getting people to do better with their money.

Simone Robbers, FMA acting director of investor capability, said over the past 10 years KiwiSaver returns had ben generally positive.

"While there have been patches of volatility, younger members of the 18-30 age group have never experienced a major fall in the value of investments in their adult lifetimes."

She said its online quiz was aimed at helping younger KiwiSaver members understand how to react when investments rise and fall in volatile markets.

Take the quiz here.

"Our research on investor confidence shows that those who are more knowledgeable and engaged with their investment are more confident.

"KiwiSaver members under the age of 30 are the least knowledgeable and confident about their investments."

What to do if the market crashes:
• Keep contributing to KiwiSaver - you are a buying assets at a lower price during a downturn
• choose the right fund now based on when you will need the money
• Lower-risk funds are better if you need the money in three to seven years
• Higher-risk funds are better if you don't need the money for a long time
• Get advice before making any changes. Switching from a higher-risk fund into a lower-risk fund during a market downturn means you lock in any losses.

Got a money question? Send me an email and we will get money expert Tom Hartmann to answer it as part of a live question and answer session on the Herald's website on Friday at 12noon.