April 7, 2025 • 11 mins
Kiwis are being urged to stay calm and stay the course as stock markets tumble.
There’s global uncertainty off the back of Donald Trump’s sweeping tariffs, and investment funds like KiwiSaver have been taking a hit.
Mortgage brokers have been facing concerns from first-home buyers, wondering what to do about the slump in their balance as they look to purchase.
Personal Finance Journalist Mary Holm told Kerre Woodham that people should always keep money they plan to spend soon out of high-risk funds.
She says that if you plan on spending a significant chunk of money within the next two to three years, you should request your KiwiSaver moved to the lowest risk fund.
For those who cut it close, Holm says to sit tight.
She told Woodham that share markets often overreact to economic events like the tariffs, and they’ll recover eventually.
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Episode Transcript
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Speaker 1 (00:06):
You're listening to the carry Wood and Morning's podcast from
News Talks. He'd be they.
Speaker 2 (00:12):
Also, given the way of the world at the moment,
given the extraordinary times in which we live, wanted to
talk to Mary Holm, who is the as you will
well know, personal finance guru. New Zealand and key we
Saver are being urged to stay calm, stay the course
(00:35):
as stock markets tumble, global uncertainty, bloody hell, this global
mayhem on the back of Donald Trump's sweeping tariffs. All
very well and good to stay calm and stay the
course and just hold on and everything will right itself.
But what if you're about to retire, and what if
you're a first home buyer who's all lined up ready
(00:56):
to pounce, only to see the value of their key
we Saver plummeting by the second. Mary Holme joins me. Now,
very good morning.
Speaker 3 (01:06):
To you, Thanks Kerry.
Speaker 2 (01:09):
It must be a really unnerving time for those about
to retire and those trying to, you know, who've got
a window of opportunity to buy a house and now
all of a sudden they can't.
Speaker 3 (01:20):
Yeah, the home buyers are perhaps more of a concern
than those who are about to retire, because no one
really spends all their savings and the minute they retire,
you know, or they shouldn't quite no, no, although having
said that, some people who still have a mortgage sort
(01:41):
of as soon as they get access to the money,
whack the whole lot off against the mortgage. And that's
generally a good thing to do. But Kerry, if they'd
been listening to you and I talking over the years,
they'd know that they shouldn't be in whether they're buying
a first home or you know, planning to spend the
money in retirement, they shouldn't be in a higher risk
(02:04):
fund with money they've planned spend soon. Really, I know
that's not we'll get in a minute to those who
didn't debate those rules, but basically it's really really you
really should put money that you plan to spend within
(02:26):
the next two or three years in one of the
very lowest risk key we saber funds and pretty much
all the providers off of those. So you just go
to your provider and say, I want to move them
the money down and you know when you're within I say,
when you're within ten years of spending. Come out of
the growth or aggressive funds into the sort of middle
(02:47):
level funds and when you're within about three years of
spend and come move to the lower risk funds with
that money. You know, typically in retirement, people will have
some money there's planning to spend soon and some that
they might not be spending for ten years or more,
and so they would be in several different funds with
(03:08):
the money according to when it will be spent. First,
home buyers, if they're planning to take all their money out,
they should really be moving all of it into into
the middle risk funds when they're about sort of three
to ten years off spending it, and then into the
(03:28):
lower risk when they're within three years of spending it,
so that that you don't cop the sort of volatility.
You still can cop it some volatility in the lower
risk funds, but not nearly as much. You know, you
won't be being nearly as hard by the current goings on.
(03:49):
For those who haven't obeyed those rules or didn't know
about them, I would say sit tight at the moment.
I mean, sure, what's happening to economies around the world
is not good. You know what the Trump administration is
doing is it's not good at bedding teriffs increasing teriffs
(04:10):
around the place. It's not good for any economy, but
it's commonly sheer markets overreact to this sort of thing.
They crashed down, and then some time later, and it
might be the next day, or it might be the
next month, or it might even be a year away,
(04:33):
they recover again. I mean we saw it with the COVID.
There was almost a crash really. The share markets plunged
in early twenty twenty, and by about August or September
that year they were coming back up again, quite strongly,
coming back up again. But for those who if you
(04:53):
were planning to spend, excuse me, all the money on
buying a first home, even though this might be a
good time to buy, although no one never knows about
that either with property markets, I would tend to and
if you've got the money in one of the higher
risk ki WE saver funds, perhaps wait for a little while,
(05:19):
because there's quite a good chance the market, the share
markets have overreacted.
Speaker 2 (05:25):
Is there a worry that people will want to chase
the losses, So even though they should be transferring perhaps
to a middle or low risk account, they're going to think, oh,
but if I do that, then I've locked in my losses.
Speaker 3 (05:40):
Yeah, that's right. So I wouldn't at this stage in
the market, I wouldn't be transferring your money to a
lower risk because you're doing it, as you say, the
very wrong time. You know you should have been doing it.
Ages go well before you plan to spend it right now,
(06:01):
I would just leave it alone. Now you might have
me on again in a month's time, carry facing callers
who are saying I did what Mary's hidden. It's got worse.
A lot that might happen, But the history says that
usually these things don't, that the markets do tend to overreact,
(06:24):
and that they correct at least somewhat. The trouble is
when you when to pick a time to make a move.
If you really feel you must make a move, I
would rather see you not make a move at all.
But if you really feel you must make a move,
there's no good way to know when. So one thing
(06:44):
you can do to sort of reduce the risk is moves.
Let's say a third of your money now into lower
risk if you're going to be spending it soon, and
a third a month from now, and a third two
months from now, or because that tends, you know, human
(07:06):
nature being what it is, we tend to get more
annoyed by a loss than we get happy by Again,
there's a lot of research to show that, and we're
a bunch of pessimists. But so what tends to happen
if you do it in you know, two or three
steps like that, is you you look back and you say, well,
at least I didn't move the whole lot at what
(07:28):
turned out to be the very worst time. You know,
you tend to say that rather than say, oh god,
I could have moved the whole lot of what turned
out to be the best time. You know. Yeah, so
that can even though it's not necessarily mathematically the best
thing to do, and I've had a bit of conversation
about that in my Herald Q and a column recently,
(07:49):
but it's psychologically the best thing to do, I think,
is to sell in you know, two or three or
four if you want to lots, especially with a few
sort of with some markets are down and you're not
that happy about what you're doing, because then you The
(08:11):
other thing is if you if you say I'm going
to move the lot, you tend just not to do
it because you say, oh, wait till tomorrow and wait
till tomorrow, and you know it might get Whereas if
you're selling just a bit at a time, yeah, you're
more likely to say, okay, okay, I'll do it with
one third of the money right now, and then you
know and and make a note that on this day
(08:33):
next month, oh, move the next lot.
Speaker 2 (08:37):
If you are one who has been researching the market,
house prices are flat, this is the time for us
to pounce. You had been planning on this for some time,
You've done your research, and then this happens. Do you
just have to take a deep breath, make a cup
of tea, and think, Okay, we'll revisit in six months.
Speaker 3 (09:00):
Yes, perhaps, yeah, I mean, there's no right answer to that.
One consolation is, if you are in a higher risk kind,
it's probably done pretty nicely over the last couple of years.
You know, the American share market, which is falling all
over the place at the moment, has done extraordinarily well
in the last few years, and so you've got to
(09:24):
acknowledge that too. It hasn't all been bad. It's it's
just not good at the moment. But there's so many
factors that go into when to buy a house. I mean,
you know, people might have baby just been born and
they therefore want to move soon, or they therefore don't
want to move soon, or there's all sorts of other
(09:45):
things going on in people's lives. But so yeah, trying
to time either the share market or the property market
is it's honestly a fulls game. So you know, I
tend to think, do it when it suits you. As
far as house bing goes, how have you owned more
(10:09):
than one different property in your life?
Speaker 2 (10:11):
Carrie? Only two?
Speaker 3 (10:13):
Yeah, that's possibly unusual, I think because I've been moving
countries and things, I've owned several probably I don't know,
six or seven over the years. And what tends to
happen is when you look back years later, you say,
that was a really good bye, that was a terrible
buye that was you know. And the point I'm trying
(10:36):
to make is that this won't this for most people
won't be the only house purchase they make in their lives.
And so if it ends up that you have rather
rotten luck on your timing this time, because it's all
about timing when the chance is quite good, you have
good luck next time when you look back. If some
of your older listeners I'm sure, say, yeah, I had.
(10:58):
I gained a huge amount on this one and I
lost some money on that one. Yeah.
Speaker 2 (11:04):
Yeah, it's just write it out. Keep your nerve, hold
your nerve. Thank you Mary Mary Holme, who has an
updated edition of her book Rich Enough question Mark, a
laid back guide for every kiwi, and that is out
now and it is really really good reading. And of
course her Saturday Morning Herald column is absolutely required reading
(11:25):
of a Saturday cup of coffee, but a gentle jazz
playing reading the Mary home column. You know, how else
would you start your Saturday.
Speaker 1 (11:34):
For more from Carry Wooden Mornings, listen live to news
talks it'd be from nine am weekdays, or follow the
podcast on iHeartRadio.
You're listening to the carry Wood and Morning's podcast from
News Talks. He'd be they.
Speaker 2 (00:12):
Also, given the way of the world at the moment,
given the extraordinary times in which we live, wanted to
talk to Mary Holm, who is the as you will
well know, personal finance guru. New Zealand and key we
Saver are being urged to stay calm, stay the course
(00:35):
as stock markets tumble, global uncertainty, bloody hell, this global
mayhem on the back of Donald Trump's sweeping tariffs. All
very well and good to stay calm and stay the
course and just hold on and everything will right itself.
But what if you're about to retire, and what if
you're a first home buyer who's all lined up ready
(00:56):
to pounce, only to see the value of their key
we Saver plummeting by the second. Mary Holme joins me. Now,
very good morning.
Speaker 3 (01:06):
To you, Thanks Kerry.
Speaker 2 (01:09):
It must be a really unnerving time for those about
to retire and those trying to, you know, who've got
a window of opportunity to buy a house and now
all of a sudden they can't.
Speaker 3 (01:20):
Yeah, the home buyers are perhaps more of a concern
than those who are about to retire, because no one
really spends all their savings and the minute they retire,
you know, or they shouldn't quite no, no, although having
said that, some people who still have a mortgage sort
(01:41):
of as soon as they get access to the money,
whack the whole lot off against the mortgage. And that's
generally a good thing to do. But Kerry, if they'd
been listening to you and I talking over the years,
they'd know that they shouldn't be in whether they're buying
a first home or you know, planning to spend the
money in retirement, they shouldn't be in a higher risk
(02:04):
fund with money they've planned spend soon. Really, I know
that's not we'll get in a minute to those who
didn't debate those rules, but basically it's really really you
really should put money that you plan to spend within
(02:26):
the next two or three years in one of the
very lowest risk key we saber funds and pretty much
all the providers off of those. So you just go
to your provider and say, I want to move them
the money down and you know when you're within I say,
when you're within ten years of spending. Come out of
the growth or aggressive funds into the sort of middle
(02:47):
level funds and when you're within about three years of
spend and come move to the lower risk funds with
that money. You know, typically in retirement, people will have
some money there's planning to spend soon and some that
they might not be spending for ten years or more,
and so they would be in several different funds with
(03:08):
the money according to when it will be spent. First,
home buyers, if they're planning to take all their money out,
they should really be moving all of it into into
the middle risk funds when they're about sort of three
to ten years off spending it, and then into the
(03:28):
lower risk when they're within three years of spending it,
so that that you don't cop the sort of volatility.
You still can cop it some volatility in the lower
risk funds, but not nearly as much. You know, you
won't be being nearly as hard by the current goings on.
(03:49):
For those who haven't obeyed those rules or didn't know
about them, I would say sit tight at the moment.
I mean, sure, what's happening to economies around the world
is not good. You know what the Trump administration is
doing is it's not good at bedding teriffs increasing teriffs
(04:10):
around the place. It's not good for any economy, but
it's commonly sheer markets overreact to this sort of thing.
They crashed down, and then some time later, and it
might be the next day, or it might be the
next month, or it might even be a year away,
(04:33):
they recover again. I mean we saw it with the COVID.
There was almost a crash really. The share markets plunged
in early twenty twenty, and by about August or September
that year they were coming back up again, quite strongly,
coming back up again. But for those who if you
(04:53):
were planning to spend, excuse me, all the money on
buying a first home, even though this might be a
good time to buy, although no one never knows about
that either with property markets, I would tend to and
if you've got the money in one of the higher
risk ki WE saver funds, perhaps wait for a little while,
(05:19):
because there's quite a good chance the market, the share
markets have overreacted.
Speaker 2 (05:25):
Is there a worry that people will want to chase
the losses, So even though they should be transferring perhaps
to a middle or low risk account, they're going to think, oh,
but if I do that, then I've locked in my losses.
Speaker 3 (05:40):
Yeah, that's right. So I wouldn't at this stage in
the market, I wouldn't be transferring your money to a
lower risk because you're doing it, as you say, the
very wrong time. You know you should have been doing it.
Ages go well before you plan to spend it right now,
(06:01):
I would just leave it alone. Now you might have
me on again in a month's time, carry facing callers
who are saying I did what Mary's hidden. It's got worse.
A lot that might happen, But the history says that
usually these things don't, that the markets do tend to overreact,
(06:24):
and that they correct at least somewhat. The trouble is
when you when to pick a time to make a move.
If you really feel you must make a move, I
would rather see you not make a move at all.
But if you really feel you must make a move,
there's no good way to know when. So one thing
(06:44):
you can do to sort of reduce the risk is moves.
Let's say a third of your money now into lower
risk if you're going to be spending it soon, and
a third a month from now, and a third two
months from now, or because that tends, you know, human
(07:06):
nature being what it is, we tend to get more
annoyed by a loss than we get happy by Again,
there's a lot of research to show that, and we're
a bunch of pessimists. But so what tends to happen
if you do it in you know, two or three
steps like that, is you you look back and you say, well,
at least I didn't move the whole lot at what
(07:28):
turned out to be the very worst time. You know,
you tend to say that rather than say, oh god,
I could have moved the whole lot of what turned
out to be the best time. You know. Yeah, so
that can even though it's not necessarily mathematically the best
thing to do, and I've had a bit of conversation
about that in my Herald Q and a column recently,
(07:49):
but it's psychologically the best thing to do, I think,
is to sell in you know, two or three or
four if you want to lots, especially with a few
sort of with some markets are down and you're not
that happy about what you're doing, because then you The
(08:11):
other thing is if you if you say I'm going
to move the lot, you tend just not to do
it because you say, oh, wait till tomorrow and wait
till tomorrow, and you know it might get Whereas if
you're selling just a bit at a time, yeah, you're
more likely to say, okay, okay, I'll do it with
one third of the money right now, and then you
know and and make a note that on this day
(08:33):
next month, oh, move the next lot.
Speaker 2 (08:37):
If you are one who has been researching the market,
house prices are flat, this is the time for us
to pounce. You had been planning on this for some time,
You've done your research, and then this happens. Do you
just have to take a deep breath, make a cup
of tea, and think, Okay, we'll revisit in six months.
Speaker 3 (09:00):
Yes, perhaps, yeah, I mean, there's no right answer to that.
One consolation is, if you are in a higher risk kind,
it's probably done pretty nicely over the last couple of years.
You know, the American share market, which is falling all
over the place at the moment, has done extraordinarily well
in the last few years, and so you've got to
(09:24):
acknowledge that too. It hasn't all been bad. It's it's
just not good at the moment. But there's so many
factors that go into when to buy a house. I mean,
you know, people might have baby just been born and
they therefore want to move soon, or they therefore don't
want to move soon, or there's all sorts of other
(09:45):
things going on in people's lives. But so yeah, trying
to time either the share market or the property market
is it's honestly a fulls game. So you know, I
tend to think, do it when it suits you. As
far as house bing goes, how have you owned more
(10:09):
than one different property in your life?
Speaker 2 (10:11):
Carrie? Only two?
Speaker 3 (10:13):
Yeah, that's possibly unusual, I think because I've been moving
countries and things, I've owned several probably I don't know,
six or seven over the years. And what tends to
happen is when you look back years later, you say,
that was a really good bye, that was a terrible
buye that was you know. And the point I'm trying
(10:36):
to make is that this won't this for most people
won't be the only house purchase they make in their lives.
And so if it ends up that you have rather
rotten luck on your timing this time, because it's all
about timing when the chance is quite good, you have
good luck next time when you look back. If some
of your older listeners I'm sure, say, yeah, I had.
(10:58):
I gained a huge amount on this one and I
lost some money on that one. Yeah.
Speaker 2 (11:04):
Yeah, it's just write it out. Keep your nerve, hold
your nerve. Thank you Mary Mary Holme, who has an
updated edition of her book Rich Enough question Mark, a
laid back guide for every kiwi, and that is out
now and it is really really good reading. And of
course her Saturday Morning Herald column is absolutely required reading
(11:25):
of a Saturday cup of coffee, but a gentle jazz
playing reading the Mary home column. You know, how else
would you start your Saturday.
Speaker 1 (11:34):
For more from Carry Wooden Mornings, listen live to news
talks it'd be from nine am weekdays, or follow the
podcast on iHeartRadio.
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