How to survive a bear market

It’s official, we are now in a bear market. But what does it mean, and how can you survive it?

What is a bear market?

A bear market is usually defined when stock prices fall over 20% from their highs. Or you might think of it being when markets experience prolonged price declines. The last bear market was in 2020 due to the Covid-19 pandemic but shares recovered reasonably quickly over about five months. You likely saw a drop in your KiwiSaver balance during this time, and it may have been the first bear market you experienced.

This time around, the bear market is being driven by Covid-19 (again), the Ukraine-Russia war, inflation, supply and labour challenges, weak consumer confidence, and rate hikes. There is a lot going on in the world right now. 

Seeing your KiwiSaver balance and other investments drop is never a nice feeling. So, what are some tips to help you survive a bear market as an investor?

Keep your emotions in check

This can be easier said than done, but try to avoid panicking, feeling anxious or worrying about your investments. Staying calm and rational when it comes to your investments is a key part of long-term success. Many of us will be investors for a large part of our lives. Investing can be a good way to build wealth over the long term, but it is not worth losing sleep or getting upset over. Market ups and downs will happen many times during your investment lifetime, and sometimes these downs will be severe and dramatic. The important thing is to take it in your stride.

Remember your long-term horizon

Investing is for the long term, and the recommended investment timeframe for shares is usually at least 10 years. This gives investors time to weather the short-term highs and lows in their portfolios. Try to focus on your long-term goals. 

Continue investing if you can

One of the great things about KiwiSaver is that most of us contribute to a KiwiSaver account every pay cycle. Dollar-cost averaging, where you invest small amounts often, is how KiwiSaver is set up for most of us. It’s an investment strategy where you invest a fixed amount regularly, no matter what the prices are and what the financial markets are doing. Sometimes you’ll buy these shares at a higher price, and your money will buy fewer shares. Sometimes you’ll buy at a lower price, and your money will buy more shares than expected. The idea is that over the long term, the price will average out. At the moment, your money will be buying shares at a lower price.

Stay the course

When you first joined your KiwiSaver provider, you selected a fund that was aligned with your investment objectives and risk tolerance. If this is still the case, then staying the course could be best. You might be tempted to switch funds during a market downturn, but if you switch, you could lock in your losses, meaning you might miss any bounce back in future returns on your investment.

Lean on the experts for support 

If you have a financial adviser, that’s great. They are there to provide support during these challenging times. Educating yourself on how investment cycles work can help too. Stay up to date with your KiwiSaver account and read your KiwiSaver provider’s communications. Contact them if you have questions or would like to talk. 


Information correct as at July 2022. Pie Funds Management Limited is the issuer and manager of the JUNO KiwiSaver Scheme. Click here for our Product Disclosure Statement. Any advice is given by Pie Funds Management Limited, and is general only. It relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees if you act on any advice. As manager of the Scheme we receive monthly fees that are determined by your balance and whether you are 13 years or over. We will benefit financially if you invest in our products. We manage any conflicts of interest via an internal compliance framework designed to ensure we meet our duties to you. For information about the advice we can provide, our duties and complaint process and how disputes can be resolved, visit www.junofunds.co.nz. All content is correct at time of publication date, unless otherwise indicated. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. Please let us know if you would like a hard copy of this disclosure information.