The big dipper
By now, nearly three million people should have received their annual KiwiSaver statements. For some, it will be a useful reminder they’re gradually building up a nest egg for their retirement. Others will be heeding the advice of various financial commentators that, for the sake of their mental wellbeing, it’s best not to look right now.
Major disruptions including the Covid pandemic and the war in Ukraine are wreaking havoc on international financial markets, where most KiwiSaver funds are invested. In the middle of June, one of the United States’ best-known indices, the S&P 500, officially entered bear territory, which means it was down at least 20% from its most recent peak.
The last time we had a lengthy bear market was during the global financial crisis (it lasted 517 days), and before that was the Dotcom crash in the early 2000s (929 days). It’s been fewer than 200 days since the S&P 500 last peaked, so it’s entirely possible things could get worse before they get better.
Rocketing prices of everything from gas to groceries are complicating the picture. In New Zealand, inflation has hit a painful 6.9%, but in the US it has already hit 8.6%, and in the
