“There’s absolutely no place for certainty in the world of investing, and that’s particularly true at turning points and during upheavals.” – Howard Marks, Nobody Knows (Yet Again)
The last few months have felt like a turning point alongside a period of upheaval. Markets are reacting to social media posts, and volatility is a persistent theme. It is hard not to be focused on the short term, given all the uncertainty, and it is easy to lose sight of our long-term investment goals as we seek to minimise short-term pain from the markets.
Usually during turbulent times, if you have done the upfront hard work of setting your long-term investment goals, the best thing to do is nothing.
Emotionally charged decision-making is never a good idea; neither is trying to time the market. Most investors struggle to get their timing right, exiting at lows and reinvesting when things improve, ultimately locking in losses.
So, what is to be done? Usually during turbulent times, if you have done the upfront hard work of setting your long-term investment goals, the best thing to do is nothing.
History gives us much-needed perspective
As we are dealing with unpredictable news headlines, the many unknowns of what will happen following Trump’s 90-day pause, and feeling like we are holding our breath for the next market reaction, we thought we would take a step back and work to understand context while learning from the past. I find that this helps immensely in times of uncertainty. A calm and rational perspective amid hysteria is refreshing, and Sandy McGregor does exactly this by looking at the history of tariffs in a bid to make sense of Trump’s moves. I encourage you to read his piece, which fills in many gaps.
... part of the reason to pick the Allan Gray Balanced Fund is to outsource your asset allocation decisions (and hopefully some of your anxiety).
It is also opportune to head back in time and look at market downturns and subsequent recoveries. Stephan Bernard reflects on events gone by and offers investors some context for investing through volatility, given our bumpy ride is likely far from over. He also looks at how the Allan Gray Balanced Fund has performed since inception, which includes many unsettling periods, reminding investors that part of the reason to pick the Balanced Fund is to outsource your asset allocation decisions (and hopefully some of your anxiety).
Beyond the US
Trump’s tariffs, in whichever guise they are implemented, are likely to impact many industries – including auto manufacturers and related sectors – and may affect the transition to electric vehicles (EVs), which has been picking up pace. EVs are growing in popularity, as evidenced by the take-up in China, where nearly every second car sold in 2024 was electric. As Raine Adams discusses, China’s automakers have managed to produce a far greater range of affordable EVs than has been the case in Western countries, thereby appealing more to the mass market. These vehicles are spilling over into other countries, including large emerging car markets such as Brazil and Southeast Asia, and even our own market, with investment opportunities emerging.
With the US dominating conversation, it perhaps won’t surprise you that our offshore partner, Orbis, continues to shy away from the US stock market, with the Orbis Global Balanced Fund only about 10% exposed to this market. Orbis is positioned against the consensus narrative of American exceptionalism and continues to find compelling prospects elsewhere. Although their piece was written at quarter-end, before the tariff-induced upheaval and subsequent recovery, Alec Cutler and Rob Perrone’s discussion of the evolving landscape reflects Orbis’ long-term views.
Investing for retirement
For most of us, retirement planning represents the longest and most important personal investment project we will undertake; one in which deliberate decisions and actions are essential. Irrespective of where you are in your journey, there are established methodologies to guide you through. Preparing holistically is key, as Nshalati Hlungwane explains in this quarter’s Investing Tutorial.
Allan Gray Orbis Foundation celebrates 20 years
This issue of our Quarterly Commentary kicks off on a high and inspiring note, paying special tribute to the Allan Gray Orbis Foundation (AGOF) as it celebrates its 20th anniversary. AGOF falls under the broader Allan & Gill Gray Foundation, which was established as a continuation of the philanthropic pursuits of the Gray family. Chief executive officer Nontobeko Mabizela describes AGOF’s incredible journey and mission since its inception in 2005 through the power of purpose-driven entrepreneurship in driving long-term, sustainable change. She also shares inspiring success stories that bring our founder’s bold vision to life.
In these times of ongoing uncertainty, I thank you for your continued trust in us.
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