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KiwiSaver balances have been moving around at an alarming rate so far this year.
Data up to the end of August showed the average KiwiSaver balanced fund was down 8.5 percent this year and last month was the worst since Covid for investment markets.
Here's what you need to know if your KiwiSaver balance has given you a surprise lately.
What's happening?
When you invest in KiwiSaver, your fund manager takes your money and puts it into investment assets. The sort of assets chosen depends on the profile of your fund - conservative funds have more of a weighting to things like term deposits and bonds and maybe some shares in things like reliable infrastructure companies. Growth funds take more risk, with more of a weighting to things like shares.
The problem is that, at the moment, investment markets around the world are going through a time. Central banks are increasing interest rates, which always tends to reduce the value of shares.
That's partly because it costs businesses more to borrow money to grow, and their customers might have less money to spend, which reduces their earnings, and because investors the rate that investors can get from taking very little risk (such as in a term deposit) grows, meaning other investments have to work harder in comparison to appeal to them.
But at the same time, these rising interest rates mean bond yields are falling. That affects conservative funds.
David Boyle, head of sales at Mint Asset Management, says he cannot remember a period of such sustained volatility. But he says the central banks' approach could be "ripping the plaster off".
"Hopefully in time we will be able to get some level of normality around pricing and inflation.
"The 10-year bond rate moved 30 basis points in a day - that's unheard of. We're seeing volatility in all of what I would call the traditional asset classes. Both bonds and equities are both reacting negatively and positively at different times of the month depending on the issues of the day," he said.
"If people were looking at their KiwiSaver every couple of days, they would have seen quite big swings, both positive and negative."
When should you panic?
The best answer to this question is "never". But if you're not an investment robot, you might have felt the odd twinge lately as the volatility rolls on.
Even Boyle says he's had the odd moment of worry. "I also know that I've lived and worked through environments where there have been some terribly challenging periods of tie. This is not unusual other than a lot of the impacts are occurring at the same time."
He says, after a long period of growth, it is normal to have a "rebalancing", particularly with the amount of money that has been printed around the world since Covid hit.
If you don't need your money in the next year or two, you can afford to grit your teeth and ride out the turbulence. Each contribution to your fund will pick up more investment assets when markets are down, so you are better placed to ride the recovery when it happens.
Shifting into more conservative assets, or withdrawing your money now, means you realise a loss that would otherwise be on paper.
He says the worst thing is to be in any investment market as a "forced seller". Someone who shifted out of growth funds could miss a further drop, but they could also miss the recovery.
"As long as it goes back up, which we all believe it will, people will be rewarded for taking that risk on board and for having a strong constitution."
Rupert Carlyon, founder of KiwiSaver provider Koura, says it's all part of the investment experience - and people need to remember that KiwiSaver is an investment, not a bank account.
"We know on average it takes three or four years to go from peak to peak, we're probably in a bit of a cycle but whether it takes three months to work out or two years, who knows?
"What we do know with a fair degree of certainty is that in five or 10 years, markets should be higher and balances should have increased. It's all about playing the long game."
What should you do if you're losing money but want to buy a house in the near future?
If you're thinking about buying a house in the next little while, ideally you should already have been in a low-risk fund.
Carlyon says when you're buying a house, the most important thing is to protect what you have. That means, if you're buying in the next year or two, you probably want to move to a conservative or even cash fund now, to protect your balance from further falls, he says.
"We don't know where it is going to go. It could get a lot worse, or it could recover. If you move to a lower risk fund then at least you know what you've got because if balances were to drop another 20 percent your house purchase could be just gone."
It could be a good idea to get personalised financial advice either from an adviser or your provider if you are in this situation.
Boyle says anyone looking to buy a house will also have seen house prices drop, which could help.
Or retire?
If you are about to turn 65, you may need to rethink a plan to withdraw your money from KiwiSaver. Expecting that you'll probably be retired for potentially another 30 years, you might decide to wait until markets pick up again to tap into your savings account.
Boyle says if you need money for a specific thing, you could withdraw it, but only take what you really need right now.
"Let the rest of it work hard for you in the medium term," he says. "If people pull all their money out now it could have a material impact on their retirement savings."
Carlyon says people shouldn't let short-term emotions affect their long-term decisions. "KiwiSaver is a long-term decision. If you've set yourself up, just because it's scary in the market you don't need to panic and change direction."
*This story originally appeared on Stuff