By Frederick Muller
As headlines continue to swirl with higher tariffs being implemented by the US, potential trade wars, tensions and war in the Middle East and in Ukraine, it’s understandable for investors to feel unsettled. Global uncertainty has a way of seeping into our thoughts and, often, our financial decisions. But history, and investment experience, reminds us of something crucial: uncertainty is not new, and it doesn’t have to derail your long-term investment goals.
Markets have weathered storms before from pandemics to political instability, recessions to rate hikes, markets have faced it all. And while short-term dips can feel jarring, they are often followed by periods of recovery and growth. The key is remaining invested long enough to benefit from those rebounds. Take the South African and Namibian equity markets, for example. Over decades, they’ve navigated war, economic sanctions, global financial crises and policy uncertainty.
Yet, time and again, they’ve delivered inflation-beating returns for those who stayed the course. To get a better perspective of how markets have recovered in the past, consider the graph below, showing the losses experienced during SA equity market crashes, and subsequent gains.
Timing the market is not the answer
It’s tempting to react when the news feels heavy, by switching to cash, pausing contributions or abandoning your strategy. But doing so may lead you to miss the best days in the market, which often come right after the worst. Missing just a handful of the market’s strongest days can significantly reduce your long-term returns. This means that sometimes, doing nothing is doing something powerful, especially if your portfolio has been carefully structured for resilience. To get a better perspective of how you could miss out by being out of the market for only a handful of days, consider the graph below showing the performance of the SA equity market over the last 25 years. The average return of the FTSE/JSE All-Share Index (ALSI) over this period was 13.2% p.a. However, excluding the best 10 days each year over this period, the average return on the ALSI would have been -13% p.a.!
What we’re doing to support your journey
Alexforbes invests in portfolios that are built to last through market turbulence, not just survive. For example, our multi-manager investment approach is designed to reduce risk and enhance stability by:
- Diversifying across multiple asset classes, sectors, regions and strategies
- Appointing top-tier asset managers locally and globally
- Blending complementary styles to navigate different market conditions A well-diversified portfolio is your best defence and your best opportunity, no matter the market and geopolitical landscape.
Keep your focus on the bigger picture
Short-term market noise can trigger strong emotions. But your goals, whether it’s retiring comfortably, building generational wealth, or funding your children’s future, deserve more than knee-jerk reactions. So, what should you do in times of crises and market volatility?
- Don’t panic. Markets move in cycles. Short-term volatility is not a new phenomenon.
- Stay diversified. A balanced, multi-asset approach helps manage risk across regions and asset classes.
- Speak to your adviser. Get context. Get reassurance. Get guidance.
- Stay invested. Let time and discipline work in your favour.
Your financial journey is too important to leave to headlines or emotion. While the world may feel unpredictable, your investment plan doesn’t have to be.
Frederick Muller is MD at Alexforbes Investments Namibia