Why tuning out short-term noise is the secret to long-term investment success

We’ve all felt it before – that little bit of panic when the markets dip or the headlines scream “recession”, “election uncertainty”, or “rate hikes ahead.” In today’s hyperconnected world, we’re bombarded with investment noise – market updates, breaking news, expert predictions, social media threads, and sensationalist headlines. But as an investor, reacting to short-term events can do more harm than good.

In fact, the most successful investors don’t try to predict the market’s every move. Instead, they stick to a plan, stay patient, and let time do the heavy lifting.

The emotional cost of market noise

It’s human nature to want to “do something” when markets are volatile, like sell during a dip or wait on the sidelines for a “better time to invest.” But data consistently shows that trying to time the market can lead to worse outcomes than simply staying invested.

Exhibit 1 below shows the impact of different investment strategies over time and compares the final value of R100,000 over a 20-year period (March 2005 – March 2025) across different investment strategies using ALSI returns:

• Perfect timing by investing at the lowest point in each calendar year
• Invest immediately on the first day of each calendar year
• Bad timing by investing at the highest point in each calendar year
• Staying in cash

Exhibit 1 | Impact of different investment strategies over time versus ending wealth (2005 – 2025)

Source: Factset. Data as as March 2025. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.

Even with the worst timing – buying at the top each year – investors still outperformed those who stayed in cash or only kept up with inflation. The takeaway? Being in the market matters more than trying to time it perfectly.

Big drops often precede big gains

We often forget that volatility works both ways. After sharp sell-offs, markets have a habit of bouncing back, and fast. The graph below shows daily returns of the JSE over major crises like the Dot-com bubble, the Global Financial Crisis, and COVID-19.

Exhibit 2 | Behavioural biases – loss aversion

Source: Factset. Data as as August 2022. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.

As can be seen in the above graph, some of the biggest daily gains quickly followed periods of steep market declines. This highlights why panic-selling during downturns can lead to missing the rebound.

There’s always a “reason to sell” – but history rewards patience

From Black Monday to the Global Financial Crisis, Brexit, COVID-19 and now geopolitical tension and tariff uncertainty, markets have weathered countless storms. Despite it all, markets have been resilient, despite market pullbacks, stocks have typically risen over the long term

Exhibit 3 | Events that rattled markets

Source: Fidelity Investments, Bloomberg Finance, L.P., January 1, 1980–December 31, 2023. U.S. Past performance is not indicative of future performance. For illustrative purposes only and not indicative of any investment.

How to stay the course in a noisy world

• Turn down the volume: avoid letting headlines drive your investment decisions.
• Have a plan: set clear goals and match them with your risk tolerance.
• Diversify: spread your investments across sectors, regions, and asset classes.
• Talk to your advisor: a good financial advisor helps you filter noise from what matters.

In conclusion

Markets will always have ups and downs, and there will always be a reason to sell. But history shows that those who stay invested through the noise are the ones who build real, long-term wealth. As Warren Buffett once said, “The stock market is designed to transfer money from the active to the patient.”

At OIG, we help our clients navigate this noise by focusing on what really matters – personalised investment strategies, diversified portfolios, and long-term success. If you’re feeling uncertain about your portfolio, now’s the time to have a conversation, not to panic.

Let’s stay invested, stay informed, and stay the course.