As the saying goes, a picture is worth a thousand words. But in the world of investing, a picture might not always tell the whole story. Looking at the JSE’s return data for April, investors could easily interpret the volatility as a sign to sell or stay out of the market. However, a closer look reveals something different: a landscape of opportunity. Beneath the sharp drops and erratic movements lies the potential to buy quality shares at attractive, discounted prices – an environment where long-term investors can benefit by staying calm and focused.

Exhibit 1 | JSE returns 2 – 30 April 2025

Source: Fundfocus, JSE. Data as at 30 April 2025. Past performance is not indicative of future performance. For illustrative purposes only.

What may initially seem like chaos or decline is often a window of opportunity – where market volatility offers the chance to buy quality shares at discounted prices. It’s a reminder that not all downturns are cause for concern; some are invitations to invest wisely.

Investors must remember – April marked the peak of escalating volatility that began in January

President Donald Trump was inaugurated for his second term on 20 January 2025. Just 13 days later, on Saturday 1 February, he delivered on a central campaign promise by signing executive orders to impose tariffs: a 25% duty on all goods from Mexico and Canada, and a 10% tariff on Chinese imports.

Markets responded swiftly. When trading opened on Monday, 4 February, the S&P 500 fell 2%, and the JSE Top 40 dropped 1.4%. But within hours, the situation shifted. Following negotiations, both Mexico and Canada agreed to intensify efforts to curb illegal immigration and drug trafficking. In response, the White House announced a one-month pause on the tariffs. Markets quickly bounced, recovering more than 1% from their intraday lows.

This marked the first flash of what investors could expect from Trump’s second term: volatility, uncertainty, and the potential for sharp policy reversals. Despite the shaky start, the JSE, which continued to offer relative value, rallied strongly and gained 7.4% to reach an all-time high on 19 March. The S&P 500 also initially recovered but began sliding from 19 February as expensive valuations met growing policy uncertainty.

Then came a turning point. On 2 April, in a move dubbed “Liberation Day,” Trump dramatically escalated his protectionist agenda. He announced a blanket 10% import duty on all goods entering the U.S., with even higher rates for 57 key trading partners. This sparked fears of inflation, supply chain disruptions, and retaliatory trade measures, triggering panic across global markets.

Within just three trading days, both the JSE and the S&P 500 tumbled roughly 14%. The VIX – the so-called fear index – spiked to extreme levels. The speed and magnitude of the sell-off made it clear: this was not a measured repositioning by rational actors, it was emotional, indiscriminate selling.

Investors driven by emotion, unable to stomach paper losses, sold in panic – some even after markets were already down 14%. On the other hand, valuation-driven investors had a rare opportunity: either to wait for further downside or start accumulating quality assets at discounted prices. Whether they chose to buy immediately or waited for further downside, they were acting from a position of principle, not panic.

At that stage, no one could say how much lower markets might fall, when they would recover, or how long recovery would take. The only thing that was certain: assets were now cheaper.

In the early stages of the sell-off, investors flocked to safe havens such as U.S. Treasuries, briefly driving yields lower. But this trend reversed almost immediately as the inflationary implications of the tariffs and the spectre of higher government borrowing costs set in. By 9 April, Treasury yields had surged by 70 basis points to 4.59%, while the 30-year yield climbed to 4.92%.

Sensing the growing unease, Trump remarked, “I saw last night where people were getting a little queasy” and announced a 90-day suspension of the new tariffs for all countries, except China. This announcement marked another abrupt policy pivot, but it was enough to jolt markets back to life.

On 7 April, the JSE, having traded as much as 5.8% down intraday, reversed course and closed the session 0.8% higher. Within a week, the local market had fully recovered its losses and climbed to new all-time highs by month-end. Investors who sold near the bottom missed the recovery entirely, effectively locking in losses and forfeiting gains – destroying up to 20% in relative value. Those who stayed invested – or took the opportunity to accumulate – finished the month in a stronger position than they started.

Let’s use an example to unpack the real cost of missing out during April

Exhibit 2 | Staying invested versus opting out (starting value R100)

Source: Fundfocus, JSE. Data as at 30 April 2025. Past performance is not indicative of future performance. For illustrative purposes only.

This chart clearly illustrates how volatile financial markets can be over short periods. Between 2 April and 30 April 2025, daily percentage changes swing significantly, with notable fluctuations in both directions. A key example of this short-term volatility is the sharp drop on 4 April 2025, where values fell by approximately -5.26%, followed by a strong rebound on 10 April 2025, rising to +4.3%. This dramatic turnaround within just six days highlights how investor sentiment and market conditions can shift rapidly.

To illustrate the financial impact of an investor with a starting value of R100

• The investor who remained invested ended the month with a R2.82 positive return
• The investor who panicked and decided to disinvest on 4 April to cash, ended April with a loss of -R8,22

To illustrate what we mean by the window of buying opportunity (assuming a starting value of R100)

• Hypothetically, if an investor invested more funds at the peak of the sell-off on 5 April, in a JSE index tracker fund, the investor would have bought in at R94.50, given the drop in market value due to panic selling.
• By buying when values were discounted, the investor’s investment value at the end of April 2025 would have been R113,01 – which is a growth of R18,51. This demonstrates how short-term market swings can present significant opportunities for gains when taking advantage of discounted prices.

While the broader environment remains volatile and uncertainty persists, the lesson is clear. Markets will always swing, policies will always shift, and fear will always present itself in moments of market stress. But time and again, investors who stay focused on valuation and long-term goals – rather than short-term noise – eventually emerge in a stronger position.

In times like these, discipline is not just a virtue. It’s a strategy. Staying invested and focused on time in the market – not timing the market – is crucial to long-term success. Market downturns, often driven by panic selling, can push valuations to attractive levels, creating opportunities for disciplined investors. Rather than reacting emotionally to short-term volatility, remaining calm and committed to a well-considered investment strategy allows you to benefit from market recoveries and compounding growth over time.