Podcast: Navigating Market Bumps: Why Time in the Market Beats Market Timing

In the latest Ghost Stories podcast, The Finance Ghost caught up with Kingsley Williams, Chief Investment Officer at Satrix*, to discuss market volatility, diversification, and the importance of long-term investing in 2025.

The Road to Financial Success Isn’t Always Smooth

Kingsley Williams, Chief Investment Officer at Satrix*, compared market volatility to the bumpy road from Lanseria to Sun City: “You’re cruising along at 120 km/h, then hit an unexpected speed bump.” This resonates with many, especially as the S&P 500 ETF drops 5% while the JSE Top 40 rises 8.5%. It highlights how diversification can help smooth out the ride.

Market Corrections: Normal, Not a Problem

Market corrections are natural, says Kingsley Williams. “They’re a feature of equity markets, not a bug.” He stresses that focusing on a 5-10 year investment horizon is key, and reacting to short-term fluctuations can distract from long-term goals.

The Danger of Recency Bias

We tend to forget past market dips when facing new ones. Williams pointed out that many investors are worried about a 5% drop in 2025 but have forgotten the 13.5% drop in 2022. His advice: keep a long-term perspective.

The Bigger Risk: Playing It Too Safe

Kingsley Williams warned that the biggest risk could be not taking enough well-rewarded risk. “If you're worried about short-term corrections, maybe risky assets aren't for you,” he said, echoing Nobel Laureate Eugene Fama’s thoughts.

The Value of Strategic Asset Allocation

Kingsley Williams stressed that over 90% of portfolio performance comes from strategic asset allocation. Rather than trying to time the market, focus on building a solid asset allocation and sticking with it, no matter short-term market movements.

Looking to Diversify?

If you’re looking to diversify your investment portfolio, the Satrix Global Balanced FOF ETF offers a cost-effective solution with a total expense ratio of just 35 basis points! This multi-asset fund combines equities, bonds, and real assets, providing a well-structured approach to global investing. Don’t miss out on the chance to access a diversified portfolio without the hassle of building it yourself.

Conclusion:

As markets shift in 2025, it serves as a reminder: successful investing is about understanding, not avoiding, volatility. Stick to a long-term strategy, embrace diversification, and remain disciplined with your asset allocation to build wealth, even in unpredictable times.

Focus on your long-term goals, embrace strategic risk, and avoid getting swayed by short-term market fluctuations.

Click here to listen.

*Satrix is a division of Sanlam Investment Management

Satrix Investments (Pty) Ltd is an approved financial service provider in terms of the Financial Advisory and Intermediary Services Act, No 37 of 2002 (“FAIS”). The information above does not constitute financial advice in terms of FAIS. Consult your financial adviser before making an investment decision. While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSP, its 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.

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. Collective investment schemes are generally medium- to long-term investments. With Unit Trusts and ETFs, the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange. ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs may incur additional costs due to being listed on the JSE. Past performance is not necessarily a guide to future performance and the value of investments / units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Should the respective portfolio engage in scrip lending, the utility percentage and related counterparties can be viewed on the ETF Minimum Disclosure Document. 

For more information, visit https://satrix.co.za/products