Despite recent market volatility KiwiSavers should be happy with their investment. Now is not the time to be cutting and running or you will miss the benefits of long term investing.

In the past few days equity markets have tumbled worldwide. A major correction is underway in both the bond and stock markets.

Reading the headlines will make anyone nervous about what is ahead for investors. If you are in KiwiSaver you may well be wondering what to do, too.

As a general response to the uncertainty, the answer is 'nothing'. Sit tight.

KiwiSaver is a great example of why it is extremely difficult to pick and time investment markets and that if you take a long-term approach to investing, the short-term volatility that occurs in markets every day should have no impact on your decision making.

If, however, you decided you wanted to change fund or move to a conservative fund, you may well lock in any paper loss and by doing so miss out on the rebound that has occurred to date.

The more time you have, the more risk you can think about taking. Time gives you the space to make back your losses and benefit from ongoing contributions and compounding returns.

A 20-year-old can generally take more investment risk than a 60-year-old, so if you have a long time to go until retirement (ie, more than 10 years), you might want to consider an investment fund that has a higher exposure to shares.

While there are exceptions to this - such as for people who are looking to withdraw money to buy a first home (if eligible) – once you've determined how long you have left until you need to access the money in your KiwiSaver account, you will know your investment time frame.

And this can help you understand your tolerance for taking on investment risk.

Your risk tolerance is how comfortable you are watching market volatility potentially affect the money in your account.

If you have a longer investment time frame, then it may allow you to take on a higher level of risk, because you have time to ride out the ups and downs that come with high-risk assets such as shares.

Another factor to consider is what your entire financial situation looks like.

What other assets will you have at retirement? To what extent are you relying on KiwiSaver to fund your retirement?

If you will be relying heavily on your KiwiSaver account, it makes sense to consider taking less risk – but again, you need to consider your investment time frame and risk tolerance before you make this decision.

If you are still concerned about your KiwiSaver funds, you know we are happy to talk to you. Call us at 0800 878 961 to speak with your adviser.