BUSINESS NEWS - The stock market isn't concerned with being politically correct or appeasing those in power.
It’s driven by real people making real decisions with real money—betting on the outlook for earnings growth, stability, inflation, taxation, and the rule of law.
Predictability in the environment is critical to well functioning markets.
Right now, the market is sending a clear message about what Trump is doing. His approach to trade—particularly the ongoing tariff battles and disruption of the Federal workforce—is creating massive uncertainty. Markets don't like uncertainty.
Just look at what the S&P 500 (the US stock market) has done compared to the JSE (our stock market) just this year - it's down over 7% compared to the local market which is up almost 5%.
That's over a 10% dispersion in just a couple of months.
Trade wars aren’t just about who can impose the highest tariffs; they’re about supply chains, pricing pressures, and global economic confidence. Investors don’t like unpredictability, and this back-and-forth is making it harder for businesses to plan ahead.
And yet, this kind of market volatility isn’t new. The S&P 500 has done this many times before, and it will do it many times again.
We tend to forget how common these drops are. Historically, markets experience a 10-20% decline roughly every 18 months. Yet every time it happens, it feels different—more alarming, more urgent.
Here’s the mistake many investors make: assuming that new concerns require new investment decisions.
Humans have a deep desire to explain the world around them. That’s fine— until it leads to impulsive changes in your portfolio. The context is always changing, but that doesn’t mean your investment approach should.
The right strategy isn’t about reacting—it’s about having a plan and sticking to it.
Start by defining your goals. Work backwards from there to determine your asset allocation. Then, focus on achieving this in the best way possible.
Don’t switch managers every time the market moves. Don’t get caught up in so-called sector or geographical rotations.
The plan is the plan, and it works because it isn’t swayed by short-term noise. So, take a breath. Ignore the headlines. And remember, this too shall pass.
Matthew Matthee has a wealth management business that specialises in retirement planning and investments. He writes about financial markets, investments, and investor psychology. He holds a Masters Degree in Economics from Stellenbosch University and a Post Graduate Diploma in Financial Planning from UFS. MatthewM@gravitonwm.com
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