“In investing, what is comfortable is rarely profitable.” — Robert Arnott

In the dynamic world of financial markets, volatility is an ever-present reality. It’s the choppy water that every long-term investor must navigate. Amidst the ups and downs of market fluctuations, it’s easy to lose sight of your financial goals and aspirations. Many investors, unnerved by the discomfort of watching their portfolio’s value fluctuate, may feel the urge to make hasty decisions. But as Robert Arnott’s quote suggests, embracing the discomfort of market volatility is often necessary for long-term profitability.

Looking back, market downturns have consistently been followed by periods of recovery and growth. In fact, some of the biggest market gains have happened shortly after a correction. By staying invested during these uncertain times, you give your portfolio the chance to rebound and potentially benefit from the subsequent recovery.

Trying to time the market – selling when prices are low and buying back in when they rise – is a risky strategy. Even experienced investors find it challenging to consistently predict market movements. More often than not, attempting to time the market results in missing out on the best days, which can significantly impact your long-term returns.

Instead of getting caught up in the short-term noise of the market, focus on the aspects you can control. Make sure your asset allocation matches your risk tolerance and investment timeline. Spread your investments across different asset classes, sectors, and geographical regions to manage risk. And consider the benefits of dollar-cost averaging – investing a fixed sum regularly regardless of market conditions. This strategy allows you to buy more units when prices are low and fewer when they’re high, potentially reducing the impact of volatility on your portfolio.

At WellsFaber, we recognise that dealing with market volatility can be challenging. But we also understand that staying the course, even during the most uncertain times, is often the clearest path to long-term financial success. By maintaining a well-diversified portfolio, keeping your long-term objectives in mind, and leveraging the power of rand-cost averaging, you can turn the discomfort of volatility into a stepping stone towards a thriving wealth space. So when market uncertainty strikes, remember: your financial journey is a marathon, not a sprint. Stay focused on your goals, trust in the resilience of the markets, and let time work in your favour.

We advise, you thrive