*This content is brought to you by Brenthurst Wealth
By Lloyd Uren *
Fear of losing money in the markets makes people do peculiar things. Like sitting on a pile of cash while waiting for market conditions to improve. Given the incredible lows, then highs, since the beginning of 2020 it’s no surprise that conservative investors are spooked.
The trouble is that the biggest risk of all is not taking one at all.
Market volatility is one of the biggest causes of investors losing money. Not because of the volatility, but because they often sell their investments when they’re at their lowest point. Fear of even greater losses leads many investors to do exactly that when they withdraw from the markets, often not reinvesting in growth assets because of this experience.
Trying to convince fearful investors that it pays to stay invested even through the bad times is never easy when emotions are involved. So much so that we tend to remember negative moments and events while glossing over the positives. For instance, everyone remembers the market crash in 2008, but seldom is it mentioned that it was followed by the longest bull market in history which ran for more than 10 years.
The best way to overcome this kind of bias is to look at the numbers because the numbers don’t lie!
Read also:Â The ABCs of investment fees
Why it doesn’t pay to time the markets
A recent study by The Schwab Centre for Financial Research tracked the outcomes of multiple investing scenarios over a 20-year period, with an annual investment amount of $2,000 per year in the S&P 500 (see graph below).
There’s no surprise that an investor with perfect timing would profit the most, it’s also a scenario we can ignore because it’s not realistic. However, investing the $2,000 as a lump sum every year and not being concerned with where markets are produced very credible growth. A very similar result was produced by investing the $2,000 consistently over a 12-month period.
The biggest surprise is how much better you would be off even if your timing was bad compared to staying in cash.
All four investing scenarios yielded an annualised return of more than 10%, while cash in the bank grew at a measly 1.22%. And guess what, the period of the study includes the financial crisis. The numbers don’t lie.
Read also:Â Stick to the basics when uncertainty strikes
The power of compounding interest
We can take this example to the next level by looking at the returns if you invested your $2000 per year investment as a lump sum (of $40,000). Invested for 20 years with an annualised return of 10%, this would yield $270Â 000!
You can read more about the value of that approach in this article by my colleague Suzean Haumann:Â Lump sum vs phased in investing.
The lesson really is that there’s no time like the present to start investing your money and making it work for you.
By taking a long-term view and applying good investing principles you can reap the benefits of compounding returns that the market has to offer. If you’re still uncertain about where to begin and how to decide what to invest your money in, then you can enlist the professional help of a financial advisor who is qualified to develop an investment that is tailored to your risk profile and financial goals.
It’s often advised to never look back unless it is to see how far you’ve come. With that said, you can look back with greater satisfaction in 20, 30, or 40 and thank yourself that you trusted that the numbers don’t lie.
- Lloyd Uren is a junior planner at Brenthurst’s Stellenbosch office.
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
