April 11, 2025 • 5 mins
Trump’s tariffs have been wreaking havoc on share markets around the world.
As a result, investment funds and KiwiSavers have been taking a hit, with Ed McKnight’s own account going down by $6.5k over the last month.
He joined Jack Tame to discuss the impacts on Kiwis, and whether people are actually in the right type of fund for their needs.
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Speaker 1 (00:07):
You're listening to the Saturday Morning with Jack team podcast
from News Talks'd.
Speaker 2 (00:11):
Be fourteen to eleven. Need McKnight from Opie's Partners is
here talking money killed her. Great to be here, Jack, Oh,
great to be speaking with you. My goodness, what a
week of turmoil for the global It's sort of hard
to keep up with everything at the moment. So I
don't think the tariffs have changed overnight, which makes well
a nice change if you like a little bit of stability.
(00:33):
But we wanted to talk to you about some of
the impacts for everyday Kiwi. So let's start off with
the impact on Kiwi savers this week, because there has
been a bit of movement.
Speaker 3 (00:43):
There has been huge movements, so the American stock market,
the S and P five hundred that went down ten
percent within around about two days, that's recovered a little bit,
recovering about half of those losses. But look, I logged
into m Kiwi saver asp portal just before I picked
up the phone to here Jack. I'm personally down six
and a half k over the last seriousy days. Though
(01:06):
I know some Keiwi's, especially those who are closer to retirement,
are going to be logging in and seeing even bigger
losses on that. Thankfully not too many changes overnight, but
there's I've been thinking a lot about first home buyers
and retirees, people who are quite close to needing to
use that money. You know, the thing we often say
to younger people is if you've got a really long
(01:29):
time horison, if you're twenty five now and you're not
going to retire till sixty five, maybe you'd typically put
your Keiwi saver in a growth fund or an aggressive fund,
something that's got a lot of exposure to shares. And
so if that's you, you probably have seen some quite
large drops. But what this has got to be thinking
about as well, if you're twenty five, is your time
(01:50):
horizon really forty years? Are you really not going to
touch that Kiwi saver until you're sixty five or are
you going to need it be a house deposit next year. Well,
if you're going to need it for your house deposit
next year, hopefully you weren't in a growth fund because
you really needed that money in a year or two years,
maybe five years. And if you were about to pull
out that key we saveor to buy it as a
(02:11):
deposit for your first home. Well, you really hope that
it hasn't dropped, you know, five K or six k,
because when you are buying that first home, every last
dollar really does count. And I've also been thinking about
those retirees. Hopefully those people are who are sixty three
and aren't going to be using that key we savor
very very shortly. Hopefully they are in the right fund
for them as well. Now you could be sixty three
(02:33):
and maybe you've got some other savings stashed OUTSPA and
you're not going to touch that key. We save it
to seventeen. Maybe then it's still okay to be at
a growth fund have a lot of shares in there.
But I think it's a really good wake up call
for Keiw's not to be too pollyannerous, sure, not to
be too optimistic in terms of the fund. Yes, shares
do tend to make more money over time, but if
(02:54):
you are going to pull out that money within the
next couple of years, just think very carefully about what
sort of funds that money that money has invested in.
Speaker 2 (03:02):
Yeah, I hur reckon. There's always a good argument. Well
it depends where you are, like you say, but there's
often a good argument for structuring a bit of a split. Right,
so you have some of your key we savers say
in a more conservative fund, you have some in a
mixed fund, you have some in an aggressive fund. I mean,
if you like me and you've got a few decades
until you're going to be retiring, then sure chuck it
all into a more aggressive fund. That makes sense. But
(03:23):
having a structured fund often makes makes sense. And like
you say, you know what a wake up call. And
let's be honest, even if, even if these tariffs are
all canceled tomorrow, the nature of Donald Trump's leadership is
that there's likely to be some volatility over the next
couple of years as well. Well, what do you think
this is going to mean for interest rates?
Speaker 3 (03:43):
Well, according to the Reserve Bank, they reckon that the
interest rates could have to come down faster. And it's
quite strange because often when we think about tariffs, we
think it's going to cause more inflation. And the more inflation,
the faster that prices go up, typically to see interest
rates increase, and certainly you'd likely see some inflation in
the US. But here's the thing. We sell a lot
(04:05):
of our stuff, a lot of our sports over to China. Now,
if China gets really hit by these tariffs and Chinese
businesses aren't going so well, the Chinese economy isn't going
so well. Well, they've got less money to buy our stuff.
And if we can't sell as much of our stuff
over to China or some of our other trading partners,
then our economy is going to slow down a bit. Now,
(04:25):
there's so many arguments for why this could cause inflation
here in New Zealand, but there are also a lot
of arguments for why it could bring our inflation down
and therefore our interest rates down. Looking at what the
Reserve Bank is saying are saying on the balance of it,
we think this is actually going to be bring our
inflation rates slightly down. That means that interest rates may
need to fall, and we're actually seeing that in the market.
(04:46):
So if I look at what it costs a bank
to borrow money and lend it out to you and
me for our mortgages, you know, those wholesale rates are
down about zero point two five percent over the last
week or so. They're pretty volatile as you'd expect, but
I am seeing a slight weakness and infrastrates interest rates
coming down slightly because of this spart. It is very revolve,
(05:06):
so we'll see what happens tomorrow.
Speaker 2 (05:08):
It's a funny old time to be alive. Ed, it's
a funny old time to be alive. I mean, never
a dull day. I think we can all agree on
that at the very least. But thank you so much.
We really really appreciate that, and we'll catch you in soon.
Speaker 1 (05:21):
Check for more from Saturday Morning with Jack Tame. Listen
live to News Talks' b from nine Am, saturday or
follow the podcast On. iHeartRadio
You're listening to the Saturday Morning with Jack team podcast
from News Talks'd.
Speaker 2 (00:11):
Be fourteen to eleven. Need McKnight from Opie's Partners is
here talking money killed her. Great to be here, Jack, Oh,
great to be speaking with you. My goodness, what a
week of turmoil for the global It's sort of hard
to keep up with everything at the moment. So I
don't think the tariffs have changed overnight, which makes well
a nice change if you like a little bit of stability.
(00:33):
But we wanted to talk to you about some of
the impacts for everyday Kiwi. So let's start off with
the impact on Kiwi savers this week, because there has
been a bit of movement.
Speaker 3 (00:43):
There has been huge movements, so the American stock market,
the S and P five hundred that went down ten
percent within around about two days, that's recovered a little bit,
recovering about half of those losses. But look, I logged
into m Kiwi saver asp portal just before I picked
up the phone to here Jack. I'm personally down six
and a half k over the last seriousy days. Though
(01:06):
I know some Keiwi's, especially those who are closer to retirement,
are going to be logging in and seeing even bigger
losses on that. Thankfully not too many changes overnight, but
there's I've been thinking a lot about first home buyers
and retirees, people who are quite close to needing to
use that money. You know, the thing we often say
to younger people is if you've got a really long
(01:29):
time horison, if you're twenty five now and you're not
going to retire till sixty five, maybe you'd typically put
your Keiwi saver in a growth fund or an aggressive fund,
something that's got a lot of exposure to shares. And
so if that's you, you probably have seen some quite
large drops. But what this has got to be thinking
about as well, if you're twenty five, is your time
(01:50):
horizon really forty years? Are you really not going to
touch that Kiwi saver until you're sixty five or are
you going to need it be a house deposit next year. Well,
if you're going to need it for your house deposit
next year, hopefully you weren't in a growth fund because
you really needed that money in a year or two years,
maybe five years. And if you were about to pull
out that key we saveor to buy it as a
(02:11):
deposit for your first home. Well, you really hope that
it hasn't dropped, you know, five K or six k,
because when you are buying that first home, every last
dollar really does count. And I've also been thinking about
those retirees. Hopefully those people are who are sixty three
and aren't going to be using that key we savor
very very shortly. Hopefully they are in the right fund
for them as well. Now you could be sixty three
(02:33):
and maybe you've got some other savings stashed OUTSPA and
you're not going to touch that key. We save it
to seventeen. Maybe then it's still okay to be at
a growth fund have a lot of shares in there.
But I think it's a really good wake up call
for Keiw's not to be too pollyannerous, sure, not to
be too optimistic in terms of the fund. Yes, shares
do tend to make more money over time, but if
(02:54):
you are going to pull out that money within the
next couple of years, just think very carefully about what
sort of funds that money that money has invested in.
Speaker 2 (03:02):
Yeah, I hur reckon. There's always a good argument. Well
it depends where you are, like you say, but there's
often a good argument for structuring a bit of a split. Right,
so you have some of your key we savers say
in a more conservative fund, you have some in a
mixed fund, you have some in an aggressive fund. I mean,
if you like me and you've got a few decades
until you're going to be retiring, then sure chuck it
all into a more aggressive fund. That makes sense. But
(03:23):
having a structured fund often makes makes sense. And like
you say, you know what a wake up call. And
let's be honest, even if, even if these tariffs are
all canceled tomorrow, the nature of Donald Trump's leadership is
that there's likely to be some volatility over the next
couple of years as well. Well, what do you think
this is going to mean for interest rates?
Speaker 3 (03:43):
Well, according to the Reserve Bank, they reckon that the
interest rates could have to come down faster. And it's
quite strange because often when we think about tariffs, we
think it's going to cause more inflation. And the more inflation,
the faster that prices go up, typically to see interest
rates increase, and certainly you'd likely see some inflation in
the US. But here's the thing. We sell a lot
(04:05):
of our stuff, a lot of our sports over to China. Now,
if China gets really hit by these tariffs and Chinese
businesses aren't going so well, the Chinese economy isn't going
so well. Well, they've got less money to buy our stuff.
And if we can't sell as much of our stuff
over to China or some of our other trading partners,
then our economy is going to slow down a bit. Now,
(04:25):
there's so many arguments for why this could cause inflation
here in New Zealand, but there are also a lot
of arguments for why it could bring our inflation down
and therefore our interest rates down. Looking at what the
Reserve Bank is saying are saying on the balance of it,
we think this is actually going to be bring our
inflation rates slightly down. That means that interest rates may
need to fall, and we're actually seeing that in the market.
(04:46):
So if I look at what it costs a bank
to borrow money and lend it out to you and
me for our mortgages, you know, those wholesale rates are
down about zero point two five percent over the last
week or so. They're pretty volatile as you'd expect, but
I am seeing a slight weakness and infrastrates interest rates
coming down slightly because of this spart. It is very revolve,
(05:06):
so we'll see what happens tomorrow.
Speaker 2 (05:08):
It's a funny old time to be alive. Ed, it's
a funny old time to be alive. I mean, never
a dull day. I think we can all agree on
that at the very least. But thank you so much.
We really really appreciate that, and we'll catch you in soon.
Speaker 1 (05:21):
Check for more from Saturday Morning with Jack Tame. Listen
live to News Talks' b from nine Am, saturday or
follow the podcast On. iHeartRadio
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