What Investment Experts Do When Markets Are Down

Investment markets have continued their volatile run this year, sending some investors into a flat panic. Should you buy? Should you hold? Should you sell? What should your next move be, given the uncertainty and unpredictability?

At times like these, experienced investors typically outperform market newcomers. To help you keep your investments on track, three investment experts from Satrix share their strategies for surviving a “down” market.

As you’ll soon learn, it’s less about clever tactical moves and more about sticking to proven fundamentals.

What’s the biggest mistake investors make during a market downturn? 

Eric Moyo, Sales Research Analyst: Forgetting why they invested in the first place. A temporary decline doesn’t mean a permanent loss. The real damage often comes from fear-driven selling that derails a long-term plan. 
Lauren Jacobs, Senior Portfolio Manager: Letting fear drive their decisions. Rather than trying to predict the perfect time to get out and back in, it is usually far more effective to focus on time in the market than timing the market.
Siyabulela Nomoyi, Quantitative Portfolio Manager: This is where the experts behave differently from panicked investors. Professional investors expect rough patches, building diversified portfolios with a mix of local shares, offshore assets, bonds, cash in a money market account, and sometimes property or gold. When trouble comes, they don’t dump everything. They only withdraw from the stable, accessible portion, while leaving their growth assets to recover.  Some even buy more shares while prices are down, treating the downturn as a sale.  

How can diversification help to reduce the damage of a downturn?

Eric Moyo: Diversification is having a Plan B before you need one. You don’t need every decision to be right; you just need to avoid one bad outcome undoing all your progress.
Lauren Jacobs: It’s one of the most powerful risk management tools available to investors. Instead of relying on the fortunes of a single company, sector, or asset class, diversification spreads your investments across many different opportunities. This means that when one area of the market is struggling, another may be holding up better or even performing well.  
Siyabulela Nomoyi: Think of diversification as not carrying all your groceries in one plastic bag. If it tears, then everything hits the pavement. Spread the groceries across a few bags. That’s how the experts survive tough seasons, and how ordinary investors can too.

What’s the value of staying invested and continuing to make regular contributions to one’s investment portfolio, when the market is crashing? Isn’t it better to press "pause" and ride out the storm?  

Eric Moyo: Your reason for investing hasn’t changed, and a market crash doesn’t make that goal disappear. A good example is the Covid-19 market crash in 2020. At the time, many people thought markets would continue falling. Instead, markets recovered much faster than most expected. The challenge is that nobody knows when a recovery will start. Investors who sell during a downturn risk missing that recovery when it eventually comes.
Lauren Jacobs: Pausing contributions may feel comfortable, but it often means missing out on the very opportunities that create long-term wealth. Consistency is what matters most. Even relatively small monthly contributions can compound into substantial amounts over time. When markets fall, the same monthly contribution buys more units or shares than it did before. In effect, you’re investing when prices are cheaper. 
Siyabulela Nomoyi: For the ordinary South African, the honest qualification is affordability. If the fuel and food squeeze means you genuinely cannot cover essentials, trimming a contribution beats taking on expensive debt at today’s higher interest rates. But if you can afford it and simply feel scared, remember that your monthly contribution during a storm isn’t money thrown into the wind, it’s you buying the market at marked-down prices, which is what turns rough patches into the best-performing months of your investing life.

What’s the best investment advice you’ve ever received about managing a portfolio during tough economic times?

Eric Moyo: Sometimes the hardest investment decision is deciding not to make one. Sometimes the most disciplined thing an investor can do is stay patient, stick to their plan and give their investments time to do what they were originally intended to do.
Lauren Jacobs: Focus on what you can control and ignore what you can’t.  You can’t control market movements, interest rates, geopolitical events, or investor sentiment. What you can control is how much you save, how consistently you invest, how diversified your portfolio is, and whether you stay disciplined when markets become volatile.  
Siyabulela Nomoyi: A huge portion of the market’s long-term gains come from a handful of its best days, which tend to arrive right in the middle of the gloom. This is exactly where professionals differ from the man on the street: fund managers and seasoned investors keep contributing (and many increase their contributions) during downturns, because they know they cannot time the bottom and that today’s fear is tomorrow’s discount. Warren Buffett’s famous line about being “greedy when others are fearful” is precisely this discipline.  

Disclaimer
_{Satrix consists of the following authorised Financial Services Providers: Satrix Managers (RF) (Pty) Ltd and Satrix Investments (Pty) Ltd. The information does not constitute financial advice. 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.}