{"id":7872,"date":"2026-06-18T05:07:49","date_gmt":"2026-06-18T05:07:49","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=7872"},"modified":"2026-06-18T05:07:49","modified_gmt":"2026-06-18T05:07:49","slug":"trying-to-time-the-market-couldve-cost-you-r1m-over-25-years","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=7872","title":{"rendered":"Trying to time the market could\u2019ve cost you R1m over 25 years"},"content":{"rendered":"

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When markets \u2013 especially equity markets \u2013 are choppy, many investors tend to get nervous. During these periods of volatility, they may exit some investments in the hope of timing their re-entry at a less \u2018nervy\u2019 point in time.<\/p>\n

Speaking at a recent \u2018The Times\u2019 event hosted by the investment manager, Maboa said: \u201cThe most common reason for this difference is because investors are often trying to time re-entry and exit from the market.<\/p>\n

\u201cWe understand why you want to do this \u2013 you want to protect yourself when you feel that periods are uncertain \u2013 but [it] often brings more risk into the portfolio than what it brings good.\u201d<\/p>\n

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To illustrate the point, he cites the return from a R100 000 investment in its flagship Allan Gray Balanced Fund in 2001.<\/p>\n

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The fund had assets of around R260 billion at the end of April, making it \u2013 by far \u2013 the largest unit trust in the country. By the end of 2025, this R100 000 investment would\u2019ve been worth R2.8 million \u2013 an average return of 14% per year.<\/p>\n

Read\/listen:<\/p>\n

\u2018Not quite 6%\u2019 fees: How this structure protects investors<\/div>\n

But Maboa says that if the same investor had missed just two of the fund\u2019s best months (in terms of returns) over the last 25 years, what would\u2019ve happened? That investor\u2019s \u201coutcomes would have been reduced by half a million rand\u201d.<\/p>\n

If they had missed the five best months over that period, the return would\u2019ve been reduced by nearly R1 million.<\/p>\n

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Source: Allan Gray<\/p>\n<\/div>\n

\u201cIt shows you how difficult it can be to time the market,\u201d he says.<\/p>\n

Naturally, the question that follows, Maboa notes, is the likelihood of an investor missing those best-performing months. He adds that it is more probable than one would think.<\/p>\n

To illustrate this, he points to the 50 best days (in terms of return) of the Allan Gray Balanced Fund, as well as the 50 worst days.<\/p>\n

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Source: Allan Gray<\/p>\n<\/div>\n

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\u201cWhat you see is that more often than not, the worst days are followed by the best days,\u201d he explains.<\/p>\n<\/blockquote>\n

\u201cSo when you try and exit the market when things feel uncertain, you\u2019re probably going to do it at the wrong time and lock in losses and when you try and get back into the market, you\u2019re going to do so when things feel a lot more comfortable and you are probably going to miss the recovery.\u201d<\/p>\n

\u201cIn being a diligent investor, this doesn\u2019t lie in you being able to predict the future, but rather it lies in you being able to make sound investment decisions based on long term timelines when making these investment decisions\u201d.<\/p>\n

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The manager is at pains to stress that time is the one variable that consistently improves the odds of success.<\/p>\n<\/blockquote>\n

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Source: Allan Gray<\/p>\n

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The illustrate this, he shows that when looking at one-year returns on the JSE over the last 25 years (measured on a daily basis), it is \u201cclear that over the short term, you\u2019ll either see very sharp spikes or declines in the valuation.<\/p>\n

\u201cNow if you\u2019re assessing whether you\u2019re meeting your investment objectives over just two days, you could make really poor decisions,\u201d says Maboa.<\/p>\n

Read: Not just gold \u2026 why this major balanced fund has outperformed in 2025<\/p>\n

He adds that if you then look at the percentage of time in which the JSE achieved real returns (in other words, after inflation) over the last 25-year period, this principle is reinforced.<\/p>\n

If you assess it \u201cover only a one-year period, the JSE would have outperformed inflation only 74% of the time, but if you assess that over five years, this increases to 96% and over 10 years, to 100% of the time\u201d.<\/p>\n<\/p><\/div>\n

#time #market #couldve #cost #R1m #years<\/p>\n","protected":false},"excerpt":{"rendered":"

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