Should you review your investment strategy during a market sell-off?

Global markets are experiencing volatility and this is impacting investments, including your KiwiSaver account. Is now a good time to review your investment strategy?

Seeing your KiwiSaver balance drop might make you feel uneasy. Even though you might know ups and downs are part of an investment journey, it can still be hard to see negative returns.

If you’re wondering if you should review your investment strategy during a sell-off, we have some tips to help you decide what’s best for you. 

When the stock market falls hard for a longer period, it’s natural to want to do something. Anything. Our life savings are often on the line, after all.

However, staying the course, meaning riding out the ups and downs of the share market, is the key to investing success over the long term.

Your KiwiSaver account

Over the long term, your investment should increase, but during the short term there will be volatility that reflects in your balance, like what’s happening at the moment globally. Growth or aggressive funds will experience more dramatic volatility too. 

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.

One way you lose money in a market dip is if you sell when your investments are at lower value. Selling your investments could mean withdrawing your money, switching providers or switching funds (for example, changing from a growth to a balanced fund). Until you sell your investments, your loss is really just a paper loss. 

You might be tempted to switch funds during a market downturn, but if you switch you could lock in your losses, meaning you will miss any bounce back in future returns on your investment.

Managing your emotions

One of the key ingredients of being a successful investor relates to your temperament and mastering your emotions. It is common knowledge that market surges and declines are mainly caused by two emotional factors: fear and greed. It is so easy to invest based on these emotions, but successful investors have a stronger control over these emotions. Patience is a key part of this. 

Investments outside your KiwiSaver account

You may have investments outside KiwiSaver that are part of your investing portfolio. This might include shares, property, managed funds or bonds. If they still align with your overall investing strategy and your personal risk tolerance, then stick with it. If you’re investing over a long period and your portfolio is diversified, a few ups and downs in the market should not make a big impact over the long term. Diversification means that some asset classes will perform better over different periods and some will perform worse, but over the long term they should average out. 

But I’ve realised my strategy isn’t right

It’s not a bad idea to review your investment strategy during a sell-off if you are feeling very anxious or worried about your investments. You might only realise your tolerance for investment ups and downs when you experience it yourself. Many investors may find they just don’t cope well in a market downturn.  If it is affecting you greatly then maybe you aren’t in the right funds or strategy, and reviewing it would be appropriate. Seeking financial advice can also be a good idea if you’re feeling unsure on your strategy and would like help from an expert. 

JUNO offers three types of funds based on your risk tolerance: Growth, Balanced and Conservative.

Over the long-term, returns in a Growth Fund are likely to be higher than those in a Conservative Fund, but the ride getting there will almost certainly be more volatile. If you are young and won’t need your KiwiSaver money any time soon, a Growth Fund could suit you. However, the closer you get to retirement, it’s appropriate to reduce your risk. Why? If you are 35 and the market falls 20%, then you have 30 years until potential retirement so your KiwiSaver account has lots of time to recover. If you are 61 and retiring in the next few years, then a Conservative Fund is probably more appropriate because you may need to use your KiwiSaver account for retirement soon. You don’t have the luxury of “time”, the best friend to investors.

Information correct as at May 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 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.