Volatility and sharp falls on stock markets worldwide, including the Tel Aviv Stock Exchange, and the shekel's appreciation against the dollar are beginning to affect the investments of the general public, especially long-time savers nearing retirement age, according to Gil Weissman, general manager of provident funds at Yashir Investment House. "Over the past months we have been experiencing a negative cycle, with sharp falls on most stock markets overshadowed by a great sense of uncertainty, which is set to continue," he said in an interview with The Jerusalem Post. "The negative sentiment is having its effects on long-term savers whose pension fund is heavily invested into stocks, and in particular on those approaching retirement age, which could be leaving them with less to retire on." Since the end of the year, the Tel Aviv-25 Index has dropped about 22 percent. The average pension savings portfolio in Israel had a 30% to 35% exposure to stocks in 2007. Taking this figures into account, the value of the average Israeli pension lost 8% since the beginning of the year. According to estimates, about NIS 35 billion from the pension portfolio of the general public has been erased during the period. The performance figures for pension funds, insurance policies for retirement savings (bituah minhalim), provident funds and continuing education funds (keren hishtalmut) for March will be published in the beginning of April. However, on the back of high volatility on the stock market in March, rough estimates of the losses are surfacing. "The past week has seen sharp declines on global markets," said Shahar Brenner, head of equities at Perfect Investment House. "This month will be a hard month for investment and fund managers, similar to the month of January where we saw sharp falls on the markets. "General provident funds have probably lost between 2% and 4% since the beginning of March, similar to January's losses. Funds that have a higher share ratio than the general average of around 30% will naturally have greater losses." Brenner said Perfect Investment House has been taking a more defensive approach in its management of funds. "We tend to be more conservative," he said. "Our funds have a fairly low share ratio of an average of around 10%, with the rest of the assets invested in large companies on the TA-25 Index, which are less export-oriented." In the marketplace there is a saying that "when it rains on the market, everyone gets wet," including even those invested in relatively safe long-term investments. But some come out better than others, and pension investments are no different. But short-term losses in pension savings experienced in a negative market cycle need to be put in the context of a long-term view since they are long-term investments. "A negative cycle must not necessarily worry young pension savers over the age of 40, since they still have another 25 years to make up for the losses when the market goes up again," Weissman said. "Those who need to be worried are long-term savers getting closer to retirement age; that is the 60-plus segment of the population who have fewer years left to offset the losses." The problem of the local pension savings market is that in the general funds, all pensions of both young and older savers are being managed, although they have different criteria of risk exposure. Therefore, Weissman said, the pension saving portfolio of young savers needs to be different than those of older savers who are closer to retirement age. For example, the pension portfolio of young savers can have a high share ratio, while the portfolio of older savers should have very little or no exposure to shares. At the end of last year, Yashir provident funds introduced pension savings tracks that allow for continual and automatic changes in the nature of the investment, according to age and life stages: the more time you have left to save, the greater the percentage of shares in your portfolio. Yadin Antebi, the Finance Ministry's supervisor of insurance and savings, was planning to turn the pension fund plan that is adapted to age groups into a compulsory model for the industry, Weissman said.