The long game wins

Investors are often tempted to chase short-term gains or retreat hastily when markets falter. However, research highlights the value of disciplined, long-term investment strategies. Staying focused on the long game could make all the difference.

There’s an old adage that says investing is a marathon, not a sprint. Perhaps now more than ever, it deserves repeating. If there’s one lesson to take from Donald Trump’s tariff whiplash, it is that the disciplined investors – those who pace themselves, block out the noise, and stay focused on their end goal – are often the ones who win.

We’ve come through a period of remarkable highs. The S&P 500, fuelled by the Magnificent 7, achieved annual gains exceeding 20% in two consecutive years (2023 and 2024) – a rarity not witnessed since the late 1990s. This surge was underpinned by what many dubbed the new era of US exceptionalism. But as we entered 2025, the tide began to turn. April was a sharp reminder of how quickly sentiment and direction can shift, as markets reacted to Trump’s declaration of “Liberation Day” and a fresh wave of headline-fuelled volatility.

Volatility shouldn’t drive hasty decisions

In an environment like this, the temptation to react emotionally can be overwhelming. A sudden correction, a political tremor, a dramatic currency move and suddenly, long-term strategy gives way to short-term panic. In my view, the most dangerous investment decisions are often made in haste, with one eye on the headlines and the other on today’s price movements.

This is where perspective becomes your greatest ally. Most investors have an investment horizon that could easily span 40 years of working life, and another 20 to 30 years in retirement. Over a period of up to 70 years, even a sharp correction or a standout year becomes just a bump in the road on a much longer investment journey.

Being a chaser doesn’t work

Let’s consider what happens when investors ignore that perspective and instead chase the previous year’s winning asset class. We looked at a hypothetical “chaser portfolio,” where, at the start of each year, an investor moves 100% of their capital into the best-performing asset class of the previous year.  To illustrate this, we plotted returns from 1 January 2008 to the end of April 2025, a period that included the Global Financial Crisis, the Covid-19 downturn and the most recent tariff-induced volatility. We compare this strategy to the underlying asset classes as well as a balanced fund. 

What Figure 1 shows is that, over time, this performance-chasing behaviour leads to profoundly poor outcomes. In fact, it delivered the worst return of any option in comparison, even underperforming the worst individual asset class. While this example is exaggerated, it highlights how destructive this behaviour can be and underscores the importance of maintaining a diversified mix of assets over time. It is also important to bear in mind that the annual switch may be subject to capital gains tax, reducing the after-tax return even further.

Source: Morningstar, dates to end April 2025 ¹

The adviser’s role in keeping clients anchored is more vital now than ever. Remind them that reacting to noise isn’t a strategy and that the most successful portfolios are often those built not on perfect timing, but on patience, discipline, and sound planning.

Investment coaching matters

Recent research continues to reinforce the value of this guidance. According to the 2024 Russell Investments survey, financial advisers can add up to 3.52% to a client’s annual return, nearly 40% of which stems from investment coaching. This includes helping clients avoid panic selling during downturns or making emotionally driven switches that lock in losses. The remaining value comes from tax-efficient planning (22%), informed asset allocation and broader family wealth strategies (21%), and active rebalancing (11%). In other words, the greatest value advisors offer isn’t just technical, it’s emotional discipline that helps clients stay on track.

So, what’s the lesson?

Think of investing like building a championship sports team. While the star player may grab headlines, just as the S&P 500 or Magnificent Seven did, it’s solid teamwork, a clear strategy and long-term planning that win the season. Or, to bring it back to the track: the marathon is won by those who conserve energy, stick to their pace, and don’t burn out chasing early front runners.

In today’s fast-moving, tweet-fuelled world, Ninety One believes the best strategy remains surprisingly timeless: stay invested, stay diversified, and stay focused on your long-term goals.

Let’s keep playing the full season.