Are you financially prepared for another market downturn?

Covid-19 created a short, sharp jolt downward for markets around the world.

Fast forward to 2021 and many markets recovered quickly, but that might not be the case next time. Sometimes markets can take years, or even decades, to recover. Are you financially prepared for another downturn? We’ve got some tips.

Are your investments diversified?

Having investments across a range of risk levels and asset classes helps spread your risk. It’s unlikely all investments would go down at the same time, and having some investments that are easily accessible can be very helpful. 

Know your strategy

Decide on your investment plan and then stay the course, avoiding the “noise” and commentary around market ups and downs. By all means stay updated on what the market’s doing, but don’t react to it. Review annually or in conjunction with a financial adviser. Some investors who sold investments or moved to a lower-risk fund during the Covid-19 dip locked in significant losses. 

Have an emergency fund

Cash is king in a crisis, and this was probably the number one lesson Kiwis learned during 2020. For those who lost their jobs abruptly, having an emergency fund was a saviour. Three to six months worth of expenses is ideal, but aim for $500 first if you find saving difficult. It’s a no brainer that people who have decent savings find downturns less stressful, knowing they have a financial safety net. 

Ditch the debt

Following on from the previous point, having to repay bad debt if you’re out of work or facing an uncertain future is stressful. If you struggle with saving, pay off high-interest debt like credit cards and car loans as fast as you can, and avoid reborrowing. 

Extra income streams?

Having multiple income streams can help if you unexpectedly lose your job. Side hustles aren’t for everyone, but may be an option that suits you. 

Consider insurance options

Some insurance types could help in a financial crisis. During Covid, many insurance providers stopped offering redundancy cover to new customers due to the uncertainty. There’s always a stand-down period too, so it’s best to be insured before any disaster hits. Insurance can be tricky, and you want to avoid being underinsured or over-insured. Know what you’re covered for. Re-read your terms and conditions and call your insurance provider if you have questions. Review your insurances every year, as your personal situation may have changed.


Information correct as at May 2021. Pie Funds Management Limited is the issuer and manager of the JUNO KiwiSaver Scheme. Click here for our Product Disclosure Statement. Any advice is given by Pie Funds Management Limited, and is general only. It relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees if you act on any advice. As manager of the Scheme we receive monthly fees that are determined by your balance and whether you are 13 years or over. We will benefit financially if you invest in our products. We manage any conflicts of interest via an internal compliance framework designed to ensure we meet our duties to you. For information about the advice we can provide, our duties and complaint process and how disputes can be resolved, visit www.junokiwisaver.co.nz. All content is correct at time of publication date, unless otherwise indicated. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. Please let us know if you would like a hard copy of this disclosure information.