Brenda Ward, editor of investing magazine Juno.

Thursday March 19

The first reaction to coronavirus for JUNO Investing magazine was paralysis, from both clients and readers. Then people realised their KiwiSaver accounts were dropping, and fear started.

We saw on our Facebook page and online that many average Kiwis don’t know how the share market works, and blamed their KiwiSaver providers for their balances dropping.

There’s a lot of fear and anger among those who are in the wrong funds for their level of risk, or for when they plan to withdraw their cash. People are swapping into lower-risk funds and locking in their losses, when they should just sit tight.

The market fundamentals are good, and companies can be strong again, but while people panic, shares will go wildly up and down. What happens is that Mum and Dad investors panic and pull out, then institutions swoop in to pick up bargains, so the market goes up again. With each wave of bad news/bargain-hunting, the cycle starts again.

The market outlook is bleak for the short-term future, as Kiwis cope with disruption to work routines and job uncertainty. They will cut their spending on luxuries like magazines. But people will want to start spending again.

At Juno, I expect Covid will hurt our ad sales a little. We’re finding some luxury international clients have been told not to advertise. A local ad or two has been pulled. But most of our clients have smart marketing plans and will stick to them.

However, this is likely to affect everyone in our industry. People are worried about their jobs, and they’ll cut out treats until they feel safer to spend.

Now, more than ever, we need to explain to people how spending keeps the economy going.