172. Why Timing Fails And Diversification Wins

Markets roared when the headlines said retreat. We open the year by asking smarter questions than “what will 2026 do?” and dig into what last year’s outliers teach us about risk, patience, and building portfolios that don’t wobble every time the news does. With Tamryn Lamb from Allan Gray joining us in studio, we walk through why South African equities and bonds delivered standout returns, how currency moves amplified gains in dollars, and why gold topped leaderboards while Bitcoin slipped. The lesson isn’t to chase what just worked. It’s to separate noise from signal and design an approach that survives uncertainty.
 
 We share our simple keep, save, grow framework to align money with time horizons so each “version of you” is protected and purposeful. Cash covers the near-term you. Diversified, goal-based portfolios serve the medium-term you. Growth assets power your future self decades out. That structure helps you ignore false urgency, rebalance with intent, and capture compounding even when sentiment turns negative. We also examine the outlook for South African assets: where precious metals drove index returns, how foreign buying supported bonds, and why moderating expectations while hunting for value in lagging areas makes sense after a strong run.
 
 Globally, concentrated leadership is meeting reality. Extended US valuations, the rise of markets outside the US, and investor scrutiny of AI spending are nudging a shift from blanket bets to selective ownership. We talk through how to position without prediction—using diversification, valuation discipline, and rule-based reviews to counter bias. If you’re ready to embrace uncertainty, stay invested, and make better decisions across cycles, this conversation will give you practical guardrails and fresh context.
 
 Enjoy the episode? Subscribe, share with a friend who’s sitting in cash, and leave a quick review to help more South African investors find the show.

Transcript

SPEAKER_02 0:12

Hello everybody, welcome to Know Your Money. I'm Brandwin Wayner.

Can 2026 Repeat 2025

SPEAKER_00 0:16

And I'm Craig Finch, and we are from Growth Financial Planning. We hope you enjoy our podcast. Hello, everybody. Tim and thank you once again for joining us in our studio. Tim and Lamb, all the way from Cape Town, Alan Gray, head of retail. Thank you so much. So another year starts and we say, What's 2026? What are the markets going to do? We had a really good 2025. Is it going to carry on through to the next year? What are your thoughts on that? What's Alan Gray's thoughts on it?

2025 Performance Snapshot

Stay Invested Not Noisy

SPEAKER_01 0:47

Yeah, I guess the first thing I would say is probably no one knows, right? I mean, I think if we yeah, often I actually we had a um one of our former chief investment officers used to say, um, you know, kind of everyone would say, What's the turning point event? Uh, and he'd be like, if I knew it, it would already have happened. But I I think what is m maybe one useful way of I hope of trying to answer that question is, you know, what are the what are the questions or or the considerations that we think you know clients, investors should be thinking about as they look out to the rest of the year. And I pick on these questions because these are probably ones that our investment team is debating. Okay. Um so the and we maybe we can stop after each one and you can ask me some questions. But the first one I thought of was, as you say, geez, 2025, the markets did a lot of heavy lifting uh in portfolios. You know, and just looking at some of the numbers, I mean, SA Equities and Bonds, it's been their best year in 20 years. Uh and so what up, you know, kind of 40% in in RANs and 20% roughly the uh the bond market. But then of course the rand appreciated, or maybe it's better to say that the dollar depreciated. Uh so actually SA equities was up 60% in dollar terms. Sure. Incredible. So that's I mean that's that's quite a that's quite a performance. And then if you look at world markets, they were up, let's say, 20% or so in dollars and are probably trading at all-time high. So, you know, not as good as SA assets, but you know, still a pretty good kind of overall result. Um and then we saw like some interesting kind of reversals. So, you know, Bitcoin, everyone's been talking about for years, that kind of moved to the bottom of the charts uh at sort of minus 8%. And uh and the top of the charts was was gold. And maybe you, you know, it's been tailwind from from people moving out uh of the dollar. So when I think about that, and I and I think about how well the markets have done, I guess a lot of our reactions will be, you know, everyone should just moderate their expectations a little. You know, that's why we stay invested for the long term. We we we actually hope to be in the market experiencing a year like last year, but we've also got to know that, you know, that doesn't mean we're gonna have the same type of year kind of looking ahead. So I'm not sure if you guys sort of think a similar thing and have been saying a similar message to your clients.

SPEAKER_00 3:32

You know, once again, time in the market, you know. Yeah. You have to stay, you don't know when it's gonna turn. And if you you thought the market was high in the beginning of last year and you decided to go to cash, you lost all the upside.

SPEAKER_01 3:45

Absolutely.

SPEAKER_00 3:45

And there was quite a nice tailwind before that, and then you were lost all that's why we don't ever do that. We stay invested, we and you're gonna get the hard discussions when it comes down. You know, we've had many, many of those through the years, so but always it bounces back in a in a in a big way, and we always stay that because you can't time it.

SPEAKER_01 4:04

No, no matter what. You also can't predict it. I mean, to your point, at the beginning of last year, you would have looked, okay, so you knew the year before every you know, half the world had gone to elections. You had all this geopolitical noise, a lot of escalation in uh conflict. Uh, you looked at kind of some of the noise Trump was making on tariffs, and you would have said, okay, the economic growth's gonna be bad and and everything's gonna fall over a cliff. And so you probably would have thought to yourself at the beginning of last year, things are gonna look tricky. And all the headlines were suggesting that things were gonna be difficult. And it just shows you that it doesn't pay to sort of follow the noise.

SPEAKER_04 4:47

No, exactly.

Living With Geopolitical Uncertainty

The Keep Save Grow Philosophy

SPEAKER_01 4:48

And actually the opportunities and the markets will kind of be driven by other factors than what's dominating the headlines. And actually that maybe brings me on to my next point because I think the geopolitical noise, it it will continue to be with us for some time. I was listening to this podcast, this guy called Neil Ferguson, and he was saying, we actually like we're in this period which is a bit like the Cold War. We're somewhere between peace and war. Uh so we're not quite yet in war because no one really wants to go to war. Okay. We're not I don't think you could really characterize what's been happening as peace. And but that is going to create uncertainty, and it's almost, you know, we almost have to get to that stage where we embrace the uncertainty. Uh and that is much kind of easier said than done.

SPEAKER_03 5:35

Um But I also think that that's where our philosophy at growth financial planning is quite important. So we believe like we have seven different relationships with money, but there's a portion of your money that you need to keep for within the year, there's a portion of your money that you need to save towards certain goals, and there's a portion of your money that you need to grow. And all of those ones would go into different portfolios. So if you put all your money in keeping in cash, you are not going to do well. If you last year had so much money in keeping and nothing in growing, you'd be upset with yourself. But each of them are different versions of you. And I think our philosophy is to teach clients to understand that there are these different versions, and you can't look at how well the equity has sort of done last year because that is only for you in 30 or 40 years' time. So you've got to sort of forget about that money.

South African Assets Outlook

SPEAKER_01 6:34

But it's hard to, I guess it's hard to kind of defer what you want today for your future self. Uh, you know, you kind of know your future self might be a bit annoyed with you, but your future self. Yeah. But it is a really important aspect. But it does, uh, I know we're gonna maybe talk about it in another episode, but it's we do often see, and uh we've got some examples of data we've seen in the platform on client behavior, how people's risk perception, so how they feel about their portfolios changes based on you know what's doing well, what's not doing well, or what's been happening in the world. And what's the noise? Yeah. And so it's and and both of those are actually what's just happened uh and what's been doing well, neither of those are good indicators of what is going to happen or what is going to do well. But yet we can see it influences how people shape their portfolios. And sometimes in showing the information, we hope it helps counteract some of that behavior.

SPEAKER_00 7:34

But also South Africa's had a negative well negative vibe last year. You know, a lot of negativity and corruption, etc. etc. We know all that. But the market did so well.

When Long Trends Start To Shift

SPEAKER_01 7:46

It's just incredible how that's and I think that's one of the the second questions or second group of questions we've actually been asking ourselves. So it's what is the outlook for SA assets? Because as you say, there really has been a kind of uh like a cognitive dissonance between what actual businesses have been feeling on the ground and what assets have done. That said, I think some of that is explained by, you know, a lot of that asset equity growth w was through precious metals. Uh so you saw this big divergence uh in returns between gold and, you know, even the kind of the the platinum businesses that were scraping the bottom of the barrel in terms of profitability have been doing kind of really well. Uh so I think when we look at then at SA assets, we're a little bit more cautious and we and we're trying to find the opportunities that maybe in the areas that haven't done um as well. But because some areas have have definitely lagged. Uh but actually SA bonds, even there are economic situations, well, they there have been some improvements to the overall economic situation. But I think, you know, sometimes um life is relative and we look relatively a little bit better than we did, you know, a year ago or two years ago compared to other emerging markets and compared to the US. And so we can see that in bonds because foreigners started buying again towards the back end of last year. And that is important for confidence and for liquidity and for the ability of the government to to finance debt. Um but some of the other, you know, the other trends that have been happening for a very long time that we can also see feel like they're starting to change. But it's it's interesting, you know, um trends happen for a long time until they well, they persist for a long time until they don't. And there has been like uh we've been almost in a one-way type market. Uh and you know, I can go through all of the ones where it's been going in one direction, like the US, everyone thinks the US is amazing, and um, and I'm not suggesting that one bets against the US because you've got an entrepreneurial bunch of businesses and great capital markets and um lots of uh good corporate governance, but the the market valuations have been very extended for a while. And last year we saw countries outside of the US outperform the US for the first time, or maybe the biggest margin in in almost nine or ten years. Um and then some of the other kind of areas are the Magnificent Seven. So those have been doing well for what feels like for a lot of people forever. But even in last year, you started to see people questioning okay, well, businesses are spending a lot of money on AI. You know, who's gonna win? So rather than just push money into any business that's spending on AI, actually trying to discern between the winners and the losers. So you look, Alphabet was up a lot and Amazon wasn't. Uh so it's it's the and the reason I highlight some of these trends is not that I think we build the, should be building the portfolio based on trends or that I know when the turning point will be. But just that be careful not to look at something that's been in place for a long time uh and not zoom out to the context of the you know much longer term history because you can then almost uh anchor to what's just happened and and not realize that it's uh that it's changing.

Teaser For Behaviour Episode And CTA

SPEAKER_00 11:20

I'm looking forward to the next episode about behavior and how clients react to trends and geopolitical. Great. Thanks, Tamar. Thanks, Tamar. Thank you. Thanks, thank you for listening. If you have enjoyed this podcast or like to subscribe, please visit our website www.growthfp.co.za. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.