This document discusses the importance of staying invested in the market through declines. It shows that if an investor had held their investment through the Global Financial Crisis (GFC) it would be worth R279k today, whereas selling at the lowest point and waiting a year to reinvest would have resulted in a balance of R204k, and staying in cash would be worth only R124k. Additionally, missing just 25 of the best market days between 1995-2016 would lower the annualized return from 15% to 8%. The risk of loss in equities also decreases the longer the investment time horizon, with risk of loss at 18% for a one-year period compared to 0% for a 10-year period. Overall,

1. Presentation Title
30 September 2014
Staying the course

2. The Importance Of Staying Invested
Ending wealth values after a market decline
• Held your investment through the GFC it would be worth R279k today.
• Sold at the trough, moved to cash and waited a year before reinvesting it would be worth
R204k.
• Sold at the trough, went into cash and stayed there it would be worth R124k.
The illustration was done between 01/01/2007 and 31/07/2016 and all returns are based in Rand. The FTSE/JSE All Share TR was used as a proxy for the equity market and Stefi Composite for the cash.
This slide shows if you invested R100k (FTSE/JSE All-Share TR) end-2006 and:

3. The Importance Of Staying Invested
Ending wealth values after a market decline
This slide includes the performance of the best large manager (R330.7k) and exiting
the market at breakeven, not the trough, before waiting a year to re-invest .
The illustration was done between 01/01/2007 and 31/07/2016 and all returns are based in Rand. The FTSE/JSE All Share TR was used as a proxy for the equity market and Stefi Composite for the cash.

4. The Cost Of Market Timing
Risk of missing the best days in the market (1995-2016)
This shows not being invested for only 25 of the best days from 1995 to 2016
Date as of 31 July 2016 Source: Morningstar Direct
changes your annualized return from 15% to 8%.

5. Risk Of Equity Market Lost Over Time
1995-2016
• Over the period 1995 to 2016 risk of equity loss moved from 18% (one year
invested) to 2% (three years invested) to 0% (10 years invested).
• Obviously one can’t assume zero downside risk when investing in equities over ten
years but it does conceptualize risk relative to the investor’s time horizon.
Date as of 31 July 2016 Source: Morningstar Direct

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