Recent headlines about inflation, oil prices, the Rand and global politics can make it feel as if something unusual is happening in markets.
In reality, market volatility is normal.
Financial markets move in cycles. Prices rise, fall, and sometimes react quickly to global events or economic news. While headlines change constantly, the principles of long-term investing remain the same.
Your financial plan was never designed around perfect market conditions. It was designed to work through uncertainty.
Long-term markets include short-term declines
The chart in the image above illustrates the long-term movement of the FTSE/JSE All Share Index, South Africa’s primary equity market benchmark. Shout out to Allan Gray research here.
Over the past two decades the market has experienced several major shocks, including:
- The early-2000s global slowdown
- The 2008 Global Financial Crisis
- The 2020 COVID-19 market shock
- Periods of geopolitical and economic uncertainty
Despite these events, the long-term trend of the market has been upward.
This is an important reminder that market declines are a normal part of investing, not a sign that something is broken.
Why having a financial strategy matters
Every portfolio we construct follows a long-term strategy aligned to your goals, investment horizons and tolerance for risk.
Because of this, we do not react to every headline or short-term movement in markets. Instead, we remain disciplined and continue following the strategy already in place. Volatility is not a flaw in markets.
It is part of what creates long-term investment returns.
Cover the short term, protect the long term
One of the most important elements of financial planning is ensuring that short-term needs are covered through emergency or liquid savings.
When short-term expenses are funded separately:
- You avoid selling long-term investments during temporary market declines
- You gain peace of mind during volatile periods
- You can continue investing when markets are cheaper
In simple terms, liquidity protects your long-term strategy.
Staying focused on the journey
Markets will always experience periods of noise and uncertainty.
What matters most is staying focused on the fundamentals:
- A clear long-term investment strategy
- Proper diversification
- Adequate short-term liquidity
- Discipline during market volatility
Over time, markets have consistently rewarded patience.
Your strategy remains in place, and we continue to guide your financial plan with a long-term perspective.
If you have any questions about your portfolio or financial plan, please feel free to contact us.