What the Two Oceans Marathon can teach us about investing

“Volatility is the price of admission…” – Morgan Housel

It’s early morning, your heart is pounding, and you are preparing for your first Two Oceans Marathon. Emotions may be all over the place, you may even be a bit sleep deprived, after a night of wondering whether you’ve prepared adequately. You’ve maintained a healthy diet, kept fit and done all you could to prepare your body for the challenge that awaits.

Preparation sets the tone for the race

Given that it’s your first time running the race, naturally you’d want to cover your bases. With one goal in mind – to finish the marathon within your targeted time – there are naturally many unknowns that lie ahead. The keyword here, however, is preparation. Although you don’t know the condition you’ll be in when crossing the finish line, you’ve prepared yourself for the obstacles that might present themselves, trusting that you have trained enough to achieve what you set out to do.

Having the end goal in mind

You can draw many parallels between these concepts of preparation and uncertainty and your investment journey, where the market can often be just as, if not more, unpredictable and unsettling than your first marathon. It’s certainly a challenge to time the outcome of the market, given how unpredictable it is on a short-term basis. Unforeseen macroeconomic events such as geopolitical tensions can lead to rising oil prices, sanctions, and trade wars. At present, for example, concerns around higher tariffs globally and the impact that they could have on trade balances, risks of returning inflation, rising interest rates, and growth expectations continually being downgraded – just to mention a few – mean that the impact on the stock market has been immensely unsettling for investors and advisers alike. These concerns might be putting pressure on policymakers to reduce their negative impact.

It’s fair to say that the first quarter of 2025 has presented significant uncertainty for market participants, and it seems that a confluence of geopolitical events has raised fears about the resilience of the global economy and prospects for investment valuations. Recently, news flow on global events has been overwhelming, particularly with South Africa seemingly in the crosshairs of the US, and the aggressive foreign policy of the Trump administration. Given the possibility of South Africa losing its African Growth and Opportunity Act (AGOA) trading benefits, and perhaps sanctions being imposed on specific politicians, it’s hard not to be concerned about the future value of your investments. History suggests, however, that during a politically transitionary period such as this, it is important to distinguish the noise from the news flow which has a bearing on economic policy and earnings expectations.

As hard as this can be, we need to keep the end goal and the process in mind. It can be challenging to maintain discipline when experiencing an emotional rollercoaster, but it is much like running a marathon: if you are able to adapt your mindset to embrace uncertainty, then you may be better placed to endure market downturns.

How to prepare for the investment marathon:

• Specify your investment goals and constraints, risk appetite and investment horizon.
• Research and select the appropriate asset managers, with the guidance of a discretionary fund manager, since they possess the expertise to cater for your investment goals. It could be extremely beneficial to consult those that are running marathons daily.
• After conducting sufficient due diligence, build a robust solutions range, improving the probability of meeting client needs through unpredictable market environments.
• Maintain a relationship with your financial adviser, see them as a coach that can advise you to reach your goals, and ensure you are provided with the tools you need to understand how market forces impact your financial plan.
• With these foundations in place, it becomes far easier to ride out times of excessive volatility. This ensures you can remain invested and endure market cycles with the end goal in mind. On the road, with the wind beating towards you, the uphill has a way of looking steeper. But with the finish line in mind, they become easier to power through.

Volatility in a visual

The chart below shows the historical performance of the S&P 500 Index over a five-year period (from 2020 to the beginning of 2025). Although past performance is not an indicator of future performance, it’s clear to see how the index rebounded from the Covid pandemic (perhaps one of the most uncertain periods investors have experienced in history) and even managed to surpass the 6 000 mark over a four-year period. During that time, the index declined significantly to below the 4 000 mark, largely attributed to post-pandemic supply chain issues, high inflation and increasing interest rates, as the US Federal Reserve (US Fed) attempted to combat the supply-induced issues caused by the pandemic. However, the market rebounded after the drop, driven by optimism over easing supply chains and possible rate cuts from the Fed. Looking back, the S&P 500 Index has experienced a drawdown 92% of the time since 1950. This is the price of entry for equity investors, because without declines in stock prices, there would be no opportunity for greater returns.

S&P 500 in the 2020s

Source: Investopedia, S&P 500

Each year presents new challenges for any given market cycle, but investment experts need to be trusted for the reasons they were selected and given the time to navigate uncertainty. Asset managers and discretionary fund managers are equipped to build, manage and review client portfolios to help mitigate risk through both portfolio construction as well as asset allocation techniques. Portfolio managers analyse portfolios regularly and forecast possible market downturns to make necessary portfolio adjustments and provide support to financial advisers to best serve their clients. With a keen eye on market trends and a deep understanding of financial products, financial advisers (with the backing of a very robust investment process, and supported by constant investment committee engagement), make informed investment decisions to ensure that your financial journey is safeguarded.

Graviton advisers are ultimately tasked with providing financial planning advice that caters for the unique needs of their clients. They are able to weather the constant unpredictability of the market, which increases the likelihood of meeting your financial goals over time, and throughout various market cycles.

In the current economic and political climate, continued volatility is all but certain. The key is to prepare ourselves, stripping out the emotion and reminding ourselves that a financial plan resembles more of a marathon than a sprint. So, choose your coach wisely, for it is their support and guidance that allows you to see the beauty of running up Chapman’s Peak, while still having your legs fight the good fight.