People who took the FMA’s KiwiSaver Risk Quiz understood the importance of keeping contributing through any investment downturn, but the results highlight some key areas where more work to help investors is needed.
More than 11,000 people have taken the quiz which was created as the FMA’s contribution to the Sorted Money Week. The quiz will remain on the FMA’s website as part of its investor resources.
17% of people who took the quiz got the question “Funds with lots of shares and property have more ups and downs than funds investing mostly in cash and bonds” wrong. The answer is true.
The question which saw the highest percentage of incorrect answers was question 6: “Choosing a low risk fund means you can stop worrying about market ups and downs.” 25% of people who took the quiz got this question incorrect. The answer is false.
More than nine out of ten people got the other questions right.
Simone Robbers, FMA Acting Director of External Communications and Investor Capability said, “It was great to see so many people who took the quiz understood the need to continue investing through any downturn and the risk of switching to a low-risk fund when markets are choppy.
One of the things we want people to take away from the quiz is funds with lots of shares and property like growth funds will be more volatile than investments in bonds or cash, but will tend to deliver better returns over the long-term.
Investors should also understand that even a low-risk fund is not a no-risk fund, with the value of any investment being impacted by market movements.”