Reasons why KiwiSaver dropping can be a good thing

At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.

In today’s blog post we share with you reasons why a drop in your KiwiSaver can be a good thing.

Your picking up cheaper units

First of all, if you are noticing a drop in your Kiwi saver balance, it also means that every payday, with your money and your employer’s money, you are obtaining cheaper units for your KiwiSaver. buying bargains today with the bigger potential for profit for tomorrow. KiwiSaver is a long-term investment.

The dip is short-term

Most people have a bit of runway in front of them before they can access KiwiSaver. So when you have a dip in the market, it just means that for a period of time, you’re picking up some real bargains. And when the market comes back up again, that’s all profit. So, it’s actually a good thing.

KiwiSaver balance dropping when you are really close to retirement or using it for a first home is not a good thing.

And that’s a different scenario.

You should speak to your financial adviser, but when there’s loads of runway in front, it is actually a very good thing.

Analyse and get educated

Another thing is that dropping KiwiSaver balances often forces people to find out why? and that new education will give them a better understanding of investing.

And that’s a good thing because once you have a better understanding of anything, any anxiety over the unknown will dissipate. So people worrying about their KiwiSaver balances going down without a good understanding of why will freak out. And they will do things like switch funds that can have a real negative impact in the long term.

So speak to a financial adviser.

Bear Markets are normal

It’s important to know that going through a bear market or a drop in the financial market is normal. It is ridiculously normal in the investment landscape.

It is essentially a lesson that all investors should learn. As an example, there have been 26 bear markets since 1929.

This also means there would have been 26 times where people took a look at their investments and have worried, people that have been through a few bear markets pretty much sit back now and don’t see it as a problem as it’s a very normal thing.

That’s a wrap

At Super- Advice, we offer a financial wellness program, reach out and get in contact with us and we will be happy to talk to you about it.

If you need any financial help or advice please get in touch with us at Super-Advice.

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