The importance of staying invested

Throughout the years, our message as Octagon Financial has consistently been ‘stay invested’. No matter what the markets are doing, no matter what you’ve heard through the grapevine, and no matter what your brother’s investor friend told him on the golf course, the ‘long game’ investment strategy is the one that delivers the best rewards.

The proof really is in the pudding. Look at this data from Sharenet, captured over a five-year period of the top 40 JSE-listed firms. The first thing you notice is the predominant upward trend. Yes, there have been small dips in the growth, but the general direction is positive.

 

Sharenet, captured over a five-year period of the top 40 JSE-listed firms

 

Even a major global event like the Covid-19 pandemic, pictured here around March 2020, wasn’t enough to halt growth. As quickly as that line drops, it climbs back up again, surpassing pre-pandemic levels less than 12 months later, and passing some of the highest points of 2017 and 2018.

It’s clear from this that the best way to deal with volatility is simply to avoid it altogether by remaining invested despite short-term market evidence to the contrary.