Economists are warning those near retirement to take a close look at their KiwiSaver portfolios, as the coronavirus outbreak starts to infect the markets.
World shares have fallen five days in a row on fears the virus, known as COVID-19, will impact trade. Though no cases of the virus have been confirmed in New Zealand, our share market hasn't been immune - dropping nearly 5 percent this week.
"The global economy is more reliant than ever on Chinese demand and its economic growth. With that in mind, the risk is that the global slump may persist through the calendar 2020 year," said ASB chief economist Nick Tuffley.
The virus emerged in Wuhan over the new year period, but in the past 24 hours there have now been more confirmed cases elsewhere in the world than in China, with a pandemic now looking more likely than ever.
Tuffley said China's drastic efforts to contain the disease will disrupt supply chains.
"For businesses, this is a time when it's really important to really be on top of their numbers and be mindful or wary of any changes in demand."
Economist Shamubeel Eaqub told The AM Show on Thursday even if it doesn't reach here, we're going to feel the economic impact. China is New Zealand's biggest trading partner, and the destination of much of our exports - but Eaqub says importers might be hit even harder.
"People forget that we have a big, long list of companies that are bloody good at manufacturing. They may not be very big, but they're niche and they're successful. Those supply chain disruptions are going to be very impactful for manufacturing, for importers, for retailers. This is coming."
The impact of the virus on share markets is also chipping away at our KiwiSaver investments - particularly those on growth funds, which in good times grow the fastest - but are also exposed to market shocks.
2019 was KiwiSaver's best year ever, with those in growth funds - largely invested in the share market - getting returns of 20 percent plus. But when the market tanks, so do growth funds.
Kiwis have about $65 billion invested in KiwiSaver, according to figures on the Reserve Bank website. About $34 billion of that is invested locally, more than half of it in the market.
Eaqub says people who aren't nearing retirement need to stay the course however, with history showing their nest egg will recover in time.
"If you're a young person, you've got years to recover and the main thing is you've got to keep contributing. These markets come and go - remember the global financial crisis? Hell, if you looked at your KiwiSaver portfolio now, you wouldn't even notice it."
But there's a different message for those nearing retirement.
"Put away some of the money you're going to need in the next decade in a very conservative, safe investment. You can buy annuities, you can put some of your money away into cash, you can put some of it into deposits. You won't be getting much, but you won't be losing much.
"Capital preservation - the stuff you're going to need for doing whatever - is really important."