This Time It’s Different

Feel free to reach out to PSG Wealth Adviser  Chrisley Botha  directly.

Now picture two people. Person A gives in to the fear and sells their investments. Person B calls their financial adviser, reviews their plan, and decides to do what? Nothing. One year later – the market has recovered. Person A stood on the sidelines, while Person B rebuilt. What made the difference? Not luck – but behaviour.

In times of panic, your greatest enemy is not the market – it’s your own emotional response.

The Predictable Emotion of Investors

During the market panic of 2020, human behaviour took over. Investment switches increased by 300% – often from growth funds to conservative options. These were not strategic decisions, but emotional reactions to red charts and bad news. Millions of rands were moved – decisions not based on focussed strategies but driven purely by fear.

Markets may be unpredictable, but human behaviour is surprisingly consistent.

The Behaviour Tax: What Panic Really Costs

When you panic and move off course, there’s a price to pay – not just emotionally, but financially. To calculate the so-called “behaviour tax” from these investment switches, Momentum looked at which funds people exited, which they moved into, and the difference in performance between the two. The results were staggering.

In March 2020, the average loss per switch was 0.13% of investment value. By May, that number had surged to 8.9%. And by August, it had ballooned to a staggering 19.44% loss – per investment switch. The cause? Not the market, but poor timing and panic-driven decisions.

Reacting the wrong way to a market downturn can cost far more than the downturn itself

Recovery Isn’t Enough – You Have to Be There

Markets recover. That’s a fact. But you have to be invested to benefit from the recovery. Many investors exited the market during COVID – and never returned. That’s costly. If you lose 20%, you need to grow by 25% just to get back to where you started. And if you’re not in the market when it rebounds, you get left behind.

Missing the recovery is often the greatest loss of all. 

The Value of a Financial Adviser

In uncertain times, a financial adviser is far more than an investment manager – they are your emotional anchor. They help you maintain perspective, remind you of your long-term goals, and prevent you from making impulsive decisions that could derail your financial future.

The true value of a good adviser lies in managing behaviour – not fund selection.

Trump and Tariffs: Another Test of Behaviour

Think back to the more recent news surrounding Trump’s import tariffs. Markets reacted negatively, sectors dropped, and the media went into overdrive. But upon analysis, the actual economic impact was relatively small – and likely short-term.

Markets sometimes behave like a child on sugar – overreacting. Your job is to stay calm and not join the panic.

This Time Is Not Different

Every crisis feels unique: in 2008 it was the banks, in 2020 a pandemic, and in 2025 it might be geopolitics or trade wars. But the emotional cycle remains the same:

Fear → Shift → Missed Recovery → Regret

Those who stay the course ultimately reap the rewards. It’s not market timers who win – it’s the disciplined investors who stay invested.

The Golden Rule of Investing

If your investment goals haven’t changed, neither should your strategy.

I recently ran the Two Oceans Half Marathon and it reminded me again that investing is very much like running a marathon. Changing your investment strategy every time there’s an uphill is like changing your route every time you see a hill. Your plan is built for volatility – trust it.

Plan, Build, Stay

• Don’t have a financial plan? It’s time to create one.
• Have a plan but feeling uncertain? Speak to your adviser.
• Feeling panicked? Stop. Think long-term.

Don’t wait for calm waters before you start planning. Build your financial anchor now – and hold onto it.

Four Dangerous Words

“This time is different...” Four of the most misleading words in investing. If you ever hear yourself saying them again, remember – it probably isn’t. Because even when it feels different, it’s rarely truly different.

The market changes. People don’t. Stay the course.