If you want a rainbow, you have to put up with a bit of rain

There is no doubt that emotions are running high in the investment community and indeed, the entire investment world, in the wake of recent market volatility.

We’ve all heard of market bubbles, and many of us know someone who’s been caught in one. Although there are plenty of lessons to be learned from past bubbles, market participants still get sucked in each time a new one comes around. A bubble is only one part of an important phase in markets.

I recently booked a holiday away with my family. At the dinner table, and with much excitement, I announced that the holiday was booked and in a few weeks we’d be on our way. I was looking forward to every aspect of the trip, but little did I know my wife had been there before. Regardless of her prior experience, I consulted with my travel agent who advised us on the must-see attractions, sight-seeing spots and experiences. Taking her advice further, when we arrived we jumped on a tour bus with the confidence that the driver had sufficient experience and knowledge to enable him to know exactly where to take us and just how to get there.

If you want to avoid being caught off guard, it is essential to have the correct partners on board who know what the different phases are, who have an understanding of how markets work, and who have a good grasp of technical analysis to help you recognise market cycles. A partner who has been there before and who understands what is needed to ensure that rash decisions are not made. And finally a partner who clearly understands the difference between ‘timing the market’ and ‘time in the market’.

Common investor mistakes you want to avoid are emotional decision making, unsolicited ‘noise’ and trying to time the market. Remember back in the day when your hairdresser told you to buy x stock or y stock because you were guaranteed to make money? Well that’s exactly the kind of noise you want to avoid (no offence to hairdressers specifically!)

Developing a process over many years is what has kept us fresh and relevant. Exercising patience and sticking to this process over the long term is what allows us to obtain consistent returns over time.

On the Octagon bus we have the correct drivers in place. This, together with several co-drivers to assist when times are good as well as when times become more difficult, our process proves that time in the markets with the correct partners is vital to ensure continued success and the achievement of your financial goals.

The solutions are often obvious once you get the questions right”

John Sculley, former CEO of Apple