Trump’s war hammers Kiwi portfolios and wallets. Here’s how hard oil shock has hit our investments

Saturday, 4 April 2026

As the war in Iran sends markets into a slump, Damian Venuto joins Lisette Reymer to discuss why timing the market is a dangerous game and why history suggests investors should simply 'hold the line.'

The start of 2026 has been a bruising period for New Zealand investors.

Craigs Investment director Mark Lister described this as the worst inmore than three years for international shares and the worst in 12 months for the local market.

US shares (-4.2%), world shares (-3.3%), European shares (-4.4%), emerging market shares (-0.3%), New Zealand shares (-4.7%), the Magnificent 7 (-11.1%), NZ listed properties (-9.3%) and bitcoin (-22%) are all down for the first three months of the year.

There’s no doubt that anyone looking at their KiwiSaver would have seen the impact this has had on their balance.

Indeed, BNZ sent a notification acknowledging customers “may have noticed a dip” in their KiwiSaver balances and offering advice on what to do in the face of the downturn.

Messages like this won’t be unique to one bank or one provider. Across the country, investment advisors will be having similar conversations with their clients and discussing the best approach to take as we face the ongoing uncertainty.

The decision by US President Donald Trump to attack Iran has had major repercussions for local investors.

In his comments, Lister stressed that taking a wider view was important during any downturn. If you were to look at the 12-month performance of the investments mentioned above, there have been inclines across the board except for bitcoin (which is down 18.3% over the last year).

Lister’s point is clear: investing is a long-term game.

“Some will be tempted to sell out, cutting their losses in case the conflict escalates again and markets fall further,” admits Lister.

“If you're a trader with a time horizon that’s measured in weeks or months, maybe that's the right approach.”

Those with a longer timeframe are best served by not trying to time the market by making a call on when we might hit the bottom and when things might recover.

“Unless you're extremely good, you won't recognise a market bottom until it's behind you,” says Lister.

Research found that advice from friends and colleagues is cited as an important source of information for 85% of investors under the age of 35, and 61% of these investors also said they were using social media as a source for investment information.

“That means by the time you jump back in, you'll have missed a fair whack of that rebound.”

Judging by the inconsistency in their statements, even the politicians directly involved seem to be unclear on the next best steps to take in the Iran war, which makes any effort on our part to predict the outcome a veritable gamble.

What we do know

The geopolitical tension in the Middle East isn't just a headline for investors. It translates directly to the fuel pump. This inflationary tail is what ASB senior economist Kim Mundy highlights in a recent report, projecting that the average household will need to find an extra $55 per week in 2026 just to keep pace.

This rise is about 50% higher than expected under usual circumstances.

For Kiwis looking to save for retirement, pay down their mortgage or invest independently, these numbers are important in giving us a guide of how much the conflict will affect the money we have coming in.

For families who do have a bit of leeway, it will mean rethinking budgets and developing a plan to navigate through this period of higher costs.

Inertia is often the silent killer of long-term wealth. As Katie Wesney, head strategic coach at Enable Me, points out, the gap between those who navigate volatility and those who succumb to it is defined by a plan.

In an unpredictable world, boring tools like emergency funds, insurance, and updated wills become your most effective defensive plays.

What to expect next

The sharp drop in business and consumer confidence figures read as a testament to how tough these higher living costs and weaker portfolios have been on the Kiwi psyche at the start of 2026.

But Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, says that context is important in all the gloom we’re currently seeing.

“I would draw a distinction between a painful quarter and a full-scale financial crisis,” he says.

“This still looks more like an externally driven oil and supply shock than a 2008-style event where the core of the financial system was breaking.”

Jeremy Sullivan warns against panic during an uncertain market.

Sullivan is right. During the Great Recession, markets dropped a staggering 56%, and economies around the world were hammered no matter where you looked.

It also pays to remember that market crashes are more common than we think. Over the last 120 years, we’ve seen major bear markets (drops of more than 20%) every four to five years, while minor crashes (10-20% drops) occur once every two years.

Sullivan says that if this energy shock is temporary, markets will normalise faster than most of us expect. But this does come with an important disclaimer.

“History tells us that markets often recover before households feel better,” Sullivan says.

“Asset prices can rebound quickly once the market sees a credible path to de-escalation or lower inflation pressure. Household wallets usually take longer, because higher fuel, freight and food costs do not disappear overnight.”

For this reason, it’s important to always distinguish a market recovery from a wallet recovery. These are different things which move at different speeds.

For investors right now, the classic advice is to stick to your strategy and ensure that you are still moving toward your long-term objective.

For Sullivan, the message is simple: don’t panic, but also don’t be complacent.

“This is a tougher environment, so investors should be asking whether their portfolio can handle both sticky inflation and slower growth, rather than assuming the next few years will look like the last few.”

The focus should be less on making dramatic calls and more on building resilience, says Sullivan.

This means diversifying your investments, ensuring you have access to cash (or liquid assets) if you suddenly need money and staying aware of how inflation is tracking.

History shows there will always be another crash or wobble down the road. It will do little for your wealth (or mental health), panicking each time there’s another dip because something unexpected has happened in the world.