While global events such as geopolitical tensions, oil price increases and interest‑rate uncertainty can make markets feel uncertain, these factors do not automatically threaten long‑term financial goals. The key risk is not the uncertainty itself, but how individual investors respond to it. Short‑term disruptions are all part of investing and treating them as permanent changes can lead to costly and unnecessary decisions.
Many South Africans are currently under pressure from the rising cost of living, currency volatility and ongoing economic uncertainty. In this environment, it becomes more difficult to stay patient and disciplined. When market discomfort lasts longer, investors may feel tempted to withdraw money too early, switch strategies, or lose confidence in plans that were designed for the long term. These reactions, rather than market movements, are often what cause the most damage to financial outcomes.
It is important to avoid constantly changing investments based on the latest interest‑rate expectations or market headlines. Trying to time each new development can result in repeated mistakes and missed opportunities when markets recover. Instead, advisers play an important role in helping clients stay focused on their long‑term goals, such as retirement income, financial security and leaving a legacy, rather than reacting to short‑term volatility.
Rather than attempting to predict unpredictable events, Investors should be building diversified portfolios that can cope with uncertainty. This includes spreading investments across different asset classes, keeping short‑term money separate from long‑term growth assets, and using structured rebalancing to keep portfolios on track. A “bucket” approach helps ensure that everyday cash needs are met without having to sell long‑term investments at the wrong time.
Ultimately, the message is to focus on what can be controlled. While global events, oil prices and currencies are beyond anyone’s influence, investors can control how much they save, how they structure their portfolios, the costs they pay, their tax efficiency and, most importantly, their behaviour. Staying disciplined and anchored to a long‑term plan remains the most reliable way to protect and grow wealth over time.
Investors are their own worst enemy in volatile markets, warns Momentum
Bertie Nel says the real danger is not oil shocks or rate shifts, but how investors react to them.
ByMotlatjo Seima
Momentum has warned that while geopolitical turmoil, oil price shocks and shifting interest rate expectations are unsettling markets, they should not derail long-term financial outcomes.
Bertie Nel, head of financial planning and advice at Momentum, said the greater risk lies not in the shocks themselves, but in how investors respond to them.
As South Africans face currency volatility, rising living costs and prolonged uncertainty, the firm argues that resilience depends on behaviourally robust portfolio construction, disciplined financial planning and advisers acting as ‘stability mechanisms’ rather than market forecasters.
Behaviour, not geopolitics, is the real risk
Global conflict, supply chain disruption and energy price volatility are filtering into household finances, but Momentum cautioned against declaring a permanent macro regime shift.
Instead, Nel said investors should distinguish between cyclical disruptions and structural change, rather than ‘hard coding’ short-term shocks into long-term assumptions.
‘While geopolitical energy risk is becoming more persistent and influential, it should not automatically be hard coded as a permanent structural assumption in all long-term models,’ he said.
‘The strategic implication is not to predict a new baseline with certainty, but to design flexible, diversified and behaviourally resilient financial plans that can absorb recurring geopolitical shocks without sacrificing long-term compounding.’
Momentum warned that stagflation-type conditions heighten the behavioural risks that already lead investors to exit markets at the worst possible time.
‘Stagflation-like conditions are exactly the kind of environment where behavioural risks don’t just persist, they intensify,’ Nel said.
When you layer rising living costs, weak growth and market volatility, the pressure becomes more personal and persistent. Investors aren’t only reacting to market movements; they’re reacting to real cashflow stress in their daily lives. That materially increases the probability of panic switching, premature withdrawals and short-term decision-making.’
He added that the danger lies in the duration of such conditions.
‘Unlike a sharp crisis, the discomfort lingers. Markets may move sideways; inflation erodes purchasing power and confidence stays low. This creates a feedback loop where investors anchor to negative sentiment, overweight recent experience and lose conviction in long-term strategies.’
Discipline beats rate calls in uncertain markets
With global rate cuts repeatedly priced in, delayed and revised, Momentum said the real danger is not uncertainty itself but the constant repositioning it triggers.
Investors who chase each interest rate narrative risk compounding errors, whipsawing between themes and missing recoveries.
‘The risk here isn’t just that rate expectations shift, it’s that investors continuously reposition for each new narrative and end up compounding mistakes instead of returns,’ Nel said.
He said advisers should act as a ‘circuit breaker’ against narrative-driven investing, helping clients focus on long-term outcomes rather than short-term policy signals.
‘Portfolios should be built around long-term goals such as retirement, income and legacy, not short-term rate calls. Whether cuts come in six months or 18 months shouldn’t derail a 10 to 20-year strategy.’
Momentum’s guidance centres on building portfolios that can absorb shocks rather than attempting to forecast them.
That includes diversifying across asset classes and time horizons, separating near-term liquidity from long-term growth, and embedding systematic rebalancing to reduce emotional decision-making.
Nel highlighted the use of a ‘bucket’ approach, where short-term needs are held in cash and low-volatility assets, medium-term allocations in balanced portfolios, and long-term capital in growth assets.
‘This ensures that when shocks hit, clients don’t need to sell long-term assets at the wrong time to fund short-term pressures,’ he said.
He also emphasised predefined rebalancing rules.
‘When markets dislocate, portfolios are automatically nudged back to target weights, forcing a buy-low, sell-high discipline without emotional interference.’
Ultimately, Nel said investors should focus on what they can control.
‘Geopolitical shocks, oil prices and currency swings are uncontrollable. Savings rates, asset allocation, costs, tax efficiency and behaviour are not. The strategy should be anchored in these controllables.’
* The article originally referred to Bertie Nel as the investment strategist at Momentum, he is in fact the head of financial planning and advice for Momentum distribution services.
