The importance of a balanced outlook in turbulent times

Should one's investment strategy shift in response to market volatility? Old Mutual Corporate Consultants' approach demonstrates the value of a balanced outlook and portfolio – and the power of playing the long game.
Many shocks and surprises occurred in the first quarter of 2025, significantly impacting stock markets and the investment world at large. These included numerous surprise announcements by Donald Trump, record cryptocurrency heights, and tech companies and indices blindsided by the sudden rise of Chinese rival AI DeepSeek – to name just a few.
Market volatility is nothing new; it is the rhythm of investment. South Africa's equity markets have weathered numerous storms, from the devastating 58% decline in the late 1960s to the sharp 21% drop during COVID-19. Globally, we have seen remarkable resilience following the dot-com crash and pandemic-related downturns.
But here is what matters: These shake-ups are not just challenges; they are opportunities. After the COVID-19 decline, markets surged into an expansionary phase with exceptional returns. While any asset class can underperform inflation temporarily (as we saw in 2022), history consistently shows that these periods are followed by significant outperformance. Additionally, regulatory evolution – like SARB's expansion of offshore investment allowances – has opened new avenues for portfolio growth and diversification.
To adapt or endure?
Our investment approach remains steadfast because it is built on decades of market wisdom. Our analysis of South Africa's equity market from 1925 to 2023 tells a compelling story, from the 58-month downturn and 72-month recovery in the 1950s to the remarkable 110-month bull run in the early 1990s. This historical perspective confirms what we have always known: markets recover, expand, and reward the patient and consistent investor.
Growth assets are notably the primary beneficiaries of this expansion, as my colleague, Head of Smoothed Bonus Products & Investment Strategy Marvin Nair, points out. It is therefore imperative for an investor to maintain as much growth asset exposure as possible throughout their investment journey.
Chasing market trends is not an optimal investment approach for four simple reasons:
Market cycles are natural and inevitable. Reacting to every fluctuation means missing the recoveries that follow.
The data is undeniable: Long-term investors consistently earn positive real returns. Short-term investors may sometimes outperform the market, Nair adds, but they cannot consistently do so.
Diversification works. Spreading investments across asset classes cushions the impact of volatility.
Market timing is a fool's errand. The 'periodic tables', as shown in our note of returns, demonstrate the impossibility of consistently predicting top performers. As Nair puts it, the adage continues to hold true: 'Time in the market is better than timing the market'.
At Old Mutual Corporate Consultants, we are guided by 'The Investor's Compass': a framework centred on long-term success rather than short-term noise. We recognise market cycles and look for strategies to harness them, not fear them. By emphasising sustained growth over time and strategic diversification across asset classes, we maximise the probability of inflation-beating returns. Above all, we champion patience – the essential ingredient for investment success.
Nair points out that our flagship Absolute Growth Portfolios (AGP) product, in particular, is designed to see through the noise and maintain high growth asset exposure throughout an investor's journey. This is critical to ensure upside participation through various market cycles.
The power of patience
Adopting a disciplined approach to investing delivers multiple benefits. Investors are more likely to achieve their long-term financial goals and enjoy superior risk management through strategic diversification. A disciplined approach also protects investors from making emotional decisions during periods of market volatility while enhancing their confidence through deep investment understanding. Investors become more adaptable to evolving market conditions without abandoning their core principles, and benefit from consistent course correction through regular portfolio reviews focusing on long-term outcomes.
This type of strategy directly targets what matters most to retirement fund members. How? By offering:
Maximum long-term growth potential through optimal growth asset allocations suitable for varying risk profiles.
Capital preservation options that enable strategic diversification, including exposure to alternative asset classes (those being a key differentiated source of returns, particularly in our Smoothed Bonus portfolios).
Inflation-beating returns that protect members' purchasing power.
Peace of mind from a consistent, proven approach that withstands market storms.
Technology can also help employers – and, therefore, their employees – to remain calm and confident in turbulent times. As they say, knowledge is power, and one can't afford to be rattled by sudden market turns. Old Mutual Corporate's proprietary solution, OnTrack™, functions as a powerful diagnostic tool, enabling employers to understand how well their retirement fund is serving members and to make data-driven improvements that ensure more employees achieve a secure retirement.
The bottom line? At Old Mutual Corporate, we navigate turbulent markets with a steady hand, delivering sustainable returns for our clients and their employees. Our long-term perspective, diversified approach, and unwavering patience create retirement journeys that do not just weather market shake-ups – they thrive because of them. DM
Author: Dennis Murray

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

The Citizen

3 hours ago

• The Citizen

Assault on Iran signals ‘oil crisis'

The US's strike in Iran could lead to increased transport charges and hiked fuel costs. Israeli security forces and first responders gather at the site of an Iranian strike that hit a residential neighbourhood in the Ramat Aviv area in Tel Aviv on June 22, 2025. AHMAD GHARABLI / AFP The last time there was a crisis this serious in the Middle East, during the Arab-Israel war of 1973, the rest of the world suffered in what is now called the 'oil crisis', as Arab oil producers reduced supplies and petrol stations everywhere ran out of fuel. In South Africa, that manifested as draconian restrictions, including a ban on fuel sales after hours and over weekends, as well as a reduction in the national speed limit from 120km/h to 80km/h to conserve fuel. When US President Donald Trump ordered the B-2 bombers to destroy Iran's supposed nuclear weapon development facilities, he set the world on what might well be a similar trajectory to 1973. This time, even if the Arab oil producers don't announce an embargo, Iran may forcibly close the Strait of Hormuz, through which most oil flows… or the Houthi rebels in Yemen may resume attacks on merchant shipping and US Navy vessels in and around the Red Sea. Those actions will have knock-on effects in increased transport charges and hiked fuel costs, which will, again, be felt around the world. Worryingly, too, Russian Deputy President Dmitri Lebedev said 'a number of countries are ready to directly supply Iran with their own nuclear warheads'. That would ratchet tensions up to a shade less than World War III in the minds of many people. It also seems that despite the ongoing Israeli assault on Iran, Tehran is far from finished… and if you doubt that, look at the damage being visited on Israel. How long the Israeli population, concentrated as it is in a very small area compared to the size of Iran, will be able to tolerate the situation, remains to be seen. Finally, will the US bombs bring the Iranians to the negotiating table – or will they harden their resolve to fight on? NOW READ: Did the US strikes succeed, and how will Iran respond?

Daily Maverick

5 hours ago

• Daily Maverick

After the Bell: No, you're not alone; the world is a mess

As the world teeters on the brink of chaos, with everything from geopolitical conflicts to the unpredictable whims of Donald Trump stirring the pot, one can't help but wonder if we've traded a pandemic for a global financial cocktail of uncertainty that feels even more volatile than before. I hope I'm not the only one who feels the world is incredibly uncertain at the moment. And in fact I almost feel less certain than I did during Covid. At least then I felt that we were all facing the same problem. It would appear that some senior figures in the South African Reserve Bank agree. On Friday the head of the bank's financial stability project, Nicola Brink, stated during a Monetary Policy Review that 'During the review period, the global financial system e xperienced a degree of uncertainty and volatility that is similar to and in some respects worse than… at the onset of the Covid-19 pandemic'. President Cyril Ramaphosa seems to agree with the bank. He said today at the Constitutional Court that 'the world has become a very dangerous place now, with all of these conflicts that are flaring up'. It may seem strange to compare anything in recent times with Covid. I mean, during that time it felt like we were facing financial Armageddon. Stock markets around the world fell dramatically, at one point the oil prices turned negative (because oil tanks were full, people were paying customers to take the stuff). But actually, the bank is probably right. This is because the sheer number of elements that lead to instability is so high now. Then it was just one thing. And the whole world was facing it at the same time, if not exactly united. Also, it was clear pretty early on that Covid was not going to last. It was not going to be with us for a decade, it was going to end. Covid is a great example of another dynamic in global markets. That in real terms, nothing ever happens. Considering how much time, thought and sheer energy is put into trying to work out how markets will react to global events, this is incredibly surprising. But it does appear to be true. Research shows that actually while markets do react to shocks in the short-term, they tend to recover quite quickly. There is an important reason for this. As The Economist put it, 'The momentum of markets can be relentless. Shares tend to grind higher over time as consumers spend, entrepreneurs innovate and companies grow.' It would take something messing with this dynamic to stop this growth from continuing. But until around 10 years ago, I had also been told that property prices always went up. That if I bought a house it would become more valuable over time. That has not been my experience. Instead, because I bought in Joburg, values are going backwards. So the same can happen to markets. And I do worry that the sheer number of elements that are creating instability in our world may be taking us closer to some kind of greater life-changing market event than at any time since World War 2. Consider the sheer number of ingredients we are dealing with. In South Africa, the biggest variable is probably still whether the coalition government survives after Ramaphosa goes. But the rest of the world is a disaster. Israel is bombing Iran, which may or may not have nuclear weapons; Iran is responding. Meanwhile Israel is using tanks to shoot crowds of people who are starving in Gaza, creating more trouble for the region. Russia has invaded Ukraine and may well threaten other countries in Europe. China now has a leader who has almost absolute power and does not appear to have groomed a successor. Sudan's civil war continues with no sign of an end, and hundreds of thousands of people are running out of food. But the biggest agent of instability is, of course, Donald Trump. Because of his position and the power of both the weapons and the economy he commands, he is easily the most important ingredient in this toxic cocktail. But this also underscores how quickly the world has changed in the last six years. Before Covid the global economy felt like it was doing okay, and we expected our economy to grow as we put State Capture behind us. Instead the world feels like it is on fire. I do think we have to be conscious of our own journey through time though. As I have got older, so the world in which I grew up has receded. As it becomes more and more different to what I grew up in (so often for the better), so it may be harder to understand. A friend said to me once that he gets really irritated that the rugby authorities change the laws every season because that makes it more and more different from the game that many people now watching used to play when they were younger. I think that's a good way of understanding how the world changes us. It also means that probably everyone around you feels the same way. But for the moment, I think there is good reason to feel uncertain.

TimesLIVE

a day ago

• TimesLIVE

Investors react to US attack on Iran nuclear sites

US President Donald Trump on Saturday said that a 'very successful attack' on three nuclear sites in Iran had been carried out. 'Iran's key nuclear enrichment facilities have been completely and totally obliterated,' Trump said in a televised Oval Office address. After days of deliberation and long before his self-imposed two-week deadline, Trump's decision to join Israel's military campaign against its major rival Iran represents a major escalation of the conflict. MARKET REACTION: With most markets closed, the only reaction was in cryptocurrencies. Ether fell more than 5%, bitcoin dipped 1%. Following are comments from some financial analysts: MARK SPINDEL, CIO, POTOMAC RIVER CAPITAL, WASHINGTON DC: 'I think the markets are going to be initially alarmed and I think oil will open higher. We don't have any damage assessment and that will take some time. Even though he has described this as 'done', we're engaged. What comes next? I think the uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It's going to raise uncertainty and volatility, particularly in oil. 'There's plenty of time to deliberate before markets open on Sunday. I'm making arrangements to talk to a few people tomorrow. We'll get an early indication when the dollar opens for trading in New Zealand. This was such a bold action, though, and it's such a big contrast to the comments about negotiating for the next two weeks.' JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND, VIRGINIA: 'Oil is sure to spike on this initial news, but will likely level in a few days. With this demonstration of force and total annihilation of its nuclear capabilities, they've lost all of their leverage and will likely hit the escape button to a peace deal.' MARK MALEK, CHIEF INVESTMENT OFFICER, SIEBERT FINANCIAL, NYC: 'I think it's going to be very positive for the stock market. I believe that on Friday if you'd asked me, I would have expected two weeks of volatility with markets trying to analyse every drib and drab of information coming out of the White House and I would have said that it would have been better to make a decision last week. 'So this will be reassuring, especially since it seems like a one and done situation and not as if (the US) is seeking a long, drawn out conflict. The biggest risk still out there is the Strait of Hormuz. It could certainly change everything if Iran has the capability to close it.' JACK ABLIN, CHIEF INVESTMENT OFFICER OF CRESSET CAPITAL, CHICAGO: 'This adds a complicated new layer of risk that we'll have to consider and pay attention to ... This is definitely going to have an impact on energy prices and potentially on inflation as well.' SAUL KAVONIC, SENIOR ENERGY ANALYST, MST MARQUEE, SYDNEY: 'This escalation could add enough pressure on Iran to see Iran back down and accept a deal that de-escalates the conflict and brings down oil prices with it. 'The more likely scenario: This US attack could see a conflagration of the conflict to include Iran responding by targeting regional American interests that could include gulf oil infrastructure in places such as Iraq or harassing passage through the Strait of Hormuz. 'Much depends on how Iran responds in the coming hours and days, but this could set us on a path towards $100 oil if Iran respond as they have previously threatened to. The information warfare that appears designed to have caught Iran off guard has also caught oil markets off guard to a degree.' RONG REN GOH, PORTFOLIO MANAGER, EASTSPRING INVESTMENTS, SINGAPORE: 'The US bombing of Iranian nuclear facilities marks a significant escalation in the Israel-Iran conflict and introduces a new phase of geopolitical risk, with direct US involvement likely to prolong tensions in the region. 'For Asian markets, the key vulnerability lies in their sensitivity to higher energy prices. A protracted conflict raises the risk of supply disruptions, which could feed into inflationary pressures and weigh on growth expectations across the region. 'With the prospects of a swift resolution now diminished, investors are likely to reprice risk across markets. I expect to see a flight to safety, with the USD bid and broad-based weakness across Asian risk assets as markets assess the potential fallout from sustained geopolitical instability and elevated oil prices.' ALEX MORRIS, CHIEF INVESTMENT OFFICER, F/M INVESTMENTS, WASHINGTON DC: Morris expects crude oil will spike to $80 or more when it resumes trading. 'That's the next stop as a knee-jerk reaction. I think that's the reason this happened on a Saturday and not a Sunday. There's a lot more that is going to happen over the next 24 hours' ERIC BEYRICH, PORTFOLIO MANAGER, SOUND INCOME STRATEGIES, LARCHMONT, NEW YORK: 'If there is nuclear fallout — all bets are off. The regime is going to conclude that it has lost everything and will do all kinds of crazy things, like commissioning terrorist attacks on embassies.' CHRISTOPHER HODGE, CHIEF US ECONOMIST, NATIXIS, NEW YORK: 'There is a plethora of potential ramifications but it appears as if the strikes were targeted, discreet, and discriminating. If so, and if the oil exporting capacity of Iran has not been compromised, then the economic fallout should be contained. 'A short-term pop in oil prices will be viewed by the Fed less as a factor that increases input costs and feeds through to inflation than it will be as a tax on consumers that suppresses demand. I wouldn't expect this to factor into the Fed's decision calculus unless the spike in oil prices is sustained.'