Mind Over Market – Is A Behaviour Gap Draining Your Wealth?

South Africa, August 2025: It’s an age-old adage in the investment world – “time in the market, not timing the market”. Yet, many investors fall prey to their emotions, making rash decisions that can have significant long-term consequences. A recent analysis of the S&P/TSX Composite from January 1986 to December 2024 illustrates this point. The data found that a US$10 000 investment left untouched would have grown to US$241 179. However, if an investor missed the 10 best-performing days during that period, their final return would be slashed by more than half to only US$112 875.

Yusuf Wadee, Head of Exchange Traded Products at Satrix*, says this “behaviour gap” – the negative impact of investors’ hasty decisions – highlights a critical aspect of investing that often gets overlooked. “When fear grips the market, the instinct to sell and cut losses can be overwhelming, triggering a knee-jerk reaction. Conversely, during a bull run, the fear of missing out can lead to impulsive buying at the worst possible time when prices are inflated. This emotional rollercoaster often results in investors buying high and selling low – the exact opposite of a sound investment strategy.” 

The Perils Of Emotional Investing

Market fluctuations are a natural part of the investment landscape. However, during volatile periods, even the most seasoned investors can find their resolve tested. Wadee illustrates this with a hypothetical scenario. “Let’s say you have someone who is consistently and diligently making recurring investments. That same investor becomes super fearful when they go through periods of uncertainty. In that instance, they won’t only consider stopping their investing but even contemplate divesting.” 

This emotional rollercoaster can lead to a destructive cycle of buying high and selling low, significantly eroding potential returns over time. As Wadee points out, “With the benefit of hindsight, you look at all these events and realise the best thing to do is just stay the course. These are just the ebb and flows of the market. You’re never going to structurally build significant wealth if you are always reacting to them.”

Bridging The Behaviour Gap With A Disciplined And Diversified Approach 

So, how can investors navigate the turbulent waters of the market without succumbing to their emotions? According to Wadee, the answer lies in a disciplined, long-term approach centred around diversification. “Diversification and time in the market are key strategies that can help investors ensure solid long-term growth.”

He adds that Exchange Traded Funds (ETFs), like those available on SatrixNOW, offer a practical and accessible way for investors to achieve diversification. “By investing in an ETF, you are essentially buying a basket of securities, which can include shares, bonds, and property, both locally and internationally. This spreads your risk, meaning that the poor performance of a single asset is less likely to have a significant impact on your overall portfolio.”

Wadee emphasises the importance of a well-diversified portfolio during uncertain times. “First, there should be a healthy diversification between local and offshore investments. You never want to put all your eggs in one basket, and the same principle applies to global investments. These provide excellent diversification, especially in periods of uncertainty.”

The Power Of A Long-Term Perspective And Staying The Course 

In an age of information overload, it’s easy to get caught up in the short-term “noise” of the market. However, Wadee says successful investing requires a long-term perspective.

“By focusing on your long-term financial goals and sticking to a well-defined investment plan, you can ride out market fluctuations and benefit from the power of compounding over time. No one knows when significant market movements will occur. So, your best chance of capturing them is to always be in the market. By embracing a disciplined, diversified, and long-term approach, investors can navigate the inevitable ups and downs of the market and stay on course to achieve their financial aspirations,” he concludes.  

*Satrix is a division of Sanlam Investment Management

Disclaimer

Satrix Investments (Pty) Ltd is an approved FSP in terms of the Financial Advisory and Intermediary Services Act (FAIS). The information does not constitute advice as contemplated in FAIS. Use or rely on this information at your own risk. Consult your Financial Adviser before making an investment decision.

Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS. 

While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.