Headlines can shake investor confidence, but discipline and long-term view remains the most reliable, deliberate strategy for investors.
We’re only a third of the way through 2026, but it feels like we’ve already had a full 12 months’ worth of alarming headlines.
It’s enough to make many of us look nervously at our KiwiSaver balance or investment portfolios and wonder if we should make changes.
But generally, we shouldn’t.
This is the view of Frank Jasper, ASB Chief Investment Officer who says: “It is challenging to read the headlines; the market tends to be myopic, focusing on one thing at a time and getting obsessed with the topic of the day. This is particularly true in the midst of crises like the conflict in Iran.”
“But we’ve looked at a whole series of events over time, and they do blow over. Generally speaking, in volatile times, holding steady is the right strategy.”
It’s particularly tough, he notes, because in almost every market correction it’s easy to think of a number of realistic scenarios where things could get a lot worse, for example the oil crisis.
“I do think about those worst-case scenarios a lot, and how they would play out, and what the world would look like – that’s part of my job,” Jasper says. “But understanding the history of events like this helps calibrate and ground my thinking, holding true to the key investment principles of a long term focus , diversification and discipline.”
Jasper says volatility and change are normal features of investing, and understanding these movements helps shape better investment decisions – preparation matters more than prediction – and ASB’s team of both local and global experts is well equipped to ride the waves.
On average, markets recover from dips in just 47 days
Since the Global Financial Crisis (GFC) in 2009, there have been 32 events where share markets have lost at least 5% of their value. Each one was a huge worry at the time: the ‘flash crash’ of 2010; slowing growth in China in 2015; trade tensions in 2018; tariffs in 2025. Markets recovered from each one and continued on to reach new highs.
“Looking at conflicts, like the Iran crisis - on average the markets recovered from these selloffs in 47 days,” Jasper says. “One year later, there’s a 68% probability that the market will be back above its valuation on the day before the event. Volatility is the cost of doing business in the share market, and the extra return you can potentially make from owning shares compared to holding cash or bonds is compensation for that volatility.”
For Jasper and his expert team at ASB, global events are carefully considered and might lead to some adjustments in their various funds.
With a general election ahead and more global shifts likely, they’re looking at market dynamics and aiming to find opportunities to buy well-priced assets or add global diversification.
“Working alongside and getting good insights from the world’s largest fund manager BlackRock helps us make informed decisions.
“We take a considered approach, adjusting portfolios in a balanced way, shifting a few percentage points of a total portfolio in a way that responds to megatrends rather than headlines. We don’t whipsaw back and forth with large chunks of capital – the real value is created by responding in a sensible and balanced way,” Jasper says.
“Election cycles and global events may create uncertainty, but sound principles outlast any single moment in time.”
KiwiSaver provides valuable diversification and inflation protection
For the 3.4 million New Zealanders who have a KiwiSaver account, choosing the right fund means considering both your timeframe (how soon you need your money) and your personal appetite for risk.
Global events can cause your balance to take a temporary tumble, particularly if your fund holds a large proportion of international shares. But this is all part of the expected ups and downs of the markets, and those growth-focused funds typically achieve higher returns over time than more conservative funds.
Owning shares in other countries is one of the major advantages of a KiwiSaver fund, Jasper adds, particularly due to the average Kiwi’s typically high exposure to New Zealand assets and the New Zealand dollar – this just by being a Kiwi and owning property in New Zealand and getting income in New Zealand dollars. Kiwis also historically tend to rely on property as their only investment strategy.
“Despite recent ASB research into investor confidence (this shows Kiwis are looking at other options like shares or managed funds for best returns on investment), there’s still a big portion of most people’s wealth that is highly dependent on property,” Jasper says.
“Your investments are a lot more resilient if you don’t have all your money in New Zealand (and in the New Zealand dollar) and are globally diversified, because not every country is affected the same way by disruptive events.
“For example, with the oil crisis, the US is the biggest energy producer in the world, so it’s set up relatively well to weather this kind of storm. But here in New Zealand we are very dependent on offshore oil. So having that international diversification is really valuable. That also applies to inflation: assets like gold, infrastructure and shares, in general, do better in inflationary environments. The diversification you get with a KiwiSaver investment is so valuable for building your total lifetime wealth.”
Find a risk strategy you can live with, even on the worst days
If you’re someone who finds it distressing to see your KiwiSaver balance fall, and the headlines keep you awake at night, Jasper says a lower volatility strategy could be better for you.
“The best risk strategy is one you can live with on the best days and the worst days.”
On the flipside, if you can withstand the dips and stay the course in uncertain times, you will typically be rewarded with higher long-term returns.
“It’s tough, because the biggest selloffs come during recessions when you’re worried about your income and your job. But you will likely earn an extra return as compensation for handling that volatility over time. Look at history and let that guide your thinking.
“You may also be thinking whether now is the right time to start investing – the truth is there is no one right time. You also don’t need a big amount to start as every little bit adds up,” Jasper says.
“If recent volatility has you questioning your approach, it may be worth taking the time to review your strategy and seek guidance if needed. The ASB team is here to help.”
For more information: asb.co.nz/invest