Dear Investor,

In our previous article, we emphasized the importance of staying invested during turbulent times. We highlighted the COVID-19 pandemic and the rapid rebound in markets that followed the initial crash—what Investment specialists call a “V-shaped recovery.” That historical example reminds us how emotional reactions can often hurt long-term investment outcomes.

Today, we are experiencing another turbulent period—this time triggered by a new global trade war, particularly between the United States and China. The U.S. recently imposed significant import tariffs on Chinese goods, and China responded in kind with its own tariffs on U.S. imports. These measures have not been limited to just the U.S. and China; several other countries, including South Africa, have also been impacted by new U.S. tariffs.

Markets respond quickly to this kind of geopolitical uncertainty. Investor sentiment dips, share prices fall, and fund values can drop sharply as a result.

Take, for example, the performance of a specific investment fund over a recent period. Between 29 March 2025 and 7 April 2025, the value of this fund fell from R1,348,156 to R1,290,963—a decrease of R57,193. This decline reflects market concerns about the escalating trade conflict.

However, what followed next is equally important. By 17 April 2025, the fund had rebounded to R1,362,242, illustrating another classic V-shaped recovery. This quick recovery reinforces a critical investment principle: Do not act emotionally during volatile periods.

The Key Takeaway

History has shown time and again that markets recover. Panic-selling during downturns often locks in losses and prevents investors from benefiting from the rebound. Staying invested—especially during uncertain times—can significantly impact your long-term investment success.

As always, the most successful investors are those who remain committed to their strategy, even when the headlines look grim.

Illustration 29 March – 07 April – 17 April 2025