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Investing for the long term

Why it makes sense to stick with your investment plans.

High performing investments often don’t stay high performing. If you choose your long-term investments wisely, whether it’s property, shares, or bonds, you’re better off sticking with them than chasing winners. Research shows that people chasing high returns can lose out because they ignore that big gains are often followed by losses. 

In the long run, people with diverse investment portfolios and who stay put during market downturns come out as winners.


Property prices go through fast, slow and low-growth periods and occasional declines. How long and strong the cycles are can vary. If house prices rose fast last year, they may continue to do that this year, or they may not – as we’ve seen recently.

Some international experts say New Zealand’s houses are still overpriced despite recent falls.

Property is usually in-between when it comes to returns and bumpiness. Our assets and inflation graph below shows how investments have grown considerably more than inflation over the years.

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Shares and share funds

Shares are a better long-term investment as they can rise and fall in value, a bit like a rollercoaster.

With some shares or share funds, the ups and downs can largely be put down to riskiness. For example, the price of shares in an electric ferry company will zoom up if the company looks likely to strike a deal with a local government transport authority. Then, if that promise is unfulfilled, the price will plunge.

If you decide to invest in shares, it’s a good idea to research the companies or industries you want to invest in. 


Some people move their KiwiSaver money from one provider to another, switching to whichever provider has recently achieved a good performance.

Switching to a new KiwiSaver fund

If your KiwiSaver fund consistently performs worse than most similar funds, it may not be managed well. Don’t jump ship straightaway, as many funds that perform badly for a few years later perform well.

If you’re considering switching providers, comparing funds with similar risks is important. For example, compare several conservative funds or several high-risk funds. Make sure your comparison includes fees and taxes, which can make a big difference. Use the Smart Investor tool on the Sorted website to compare funds.

Smart Investor |

If you’ve decided to change providers, contact the provider you want to change to. They will get your current provider to move your money and tell Inland Revenue that you have switched funds.

You should shift your current KiwiSaver risk level for one of two reasons only. You are: 

  • worried about the volatility of a higher-risk fund, or
  • need your money soon — for example, if you’re planning to use your KiwiSaver to buy your first home or are close to retirement.

In both cases, make the switch regardless of what is happening in the markets at the time. And don’t move back again later.

Talk to your KiwiSaver provider or financial advisor before switching funds.

Want to learn more?