The Nature of Investment Markets

I invite you to use this tool to explore how investment markets behave over time through your own experience. It is designed to emulate the long run investment journey of New Zealanders moving into retirement. As you test different approaches, several enduring principles tend to reveal themselves:

• Higher risk is often associated with higher expected return - but risk is still risk, and negative periods are a natural part of investing.

• Time in the market typically outweighs attempts to time it. Remaining in a higher growth fund while you still have many years of saving ahead can meaningfully improve long term outcomes. Many retirees then shift to a balanced fund to manage risk.

• In retirement, the most reliable lever is not how aggressively you invest, but how you manage your spending. Moderating withdrawals in challenging years across a 25 year retirement can significantly improve the likelihood that your portfolio lasts as long as you do.