The art of a smaller profit
We are living in a VUCA world, defined by volatility, uncertainty, complexity, and ambiguity. In such a landscape, the temptation for many investors is quit before things get worse. Trustees start asking the same thing, do I dump everything now and wait for the dust to settle, or do I have a white-knuckle ride through the hiatus?
The truth is, we have no idea what’s coming next and neither does anyone else. President Trump is like improvised jazz, you have no idea where he is going or when it will end.
Thinking of selling up? Market timing is a siren song that leads to expensive shipwrecks. It requires being right twice: once on the exit and once on the re-entry. It is a feat so statistically improbable that most professionals simply recommend staying put.
If you find yourself needing liquidity in a falling market, it’s easy to feel like you’re losing. But context is everything and trustee attitudes can be distilled as follows:
The Loss Illusion: When investors often define a 'loss' as any price lower than the portfolio's all-time peak.
The Straight Line Fallacy: Expecting markets to only move upward, which is is a Panglossian fantasy.
The Recency Bias: Giving undue weight to very recent events. If the market crashed yesterday, this bias leads them to believe it will continue crashing tomorrow, ignoring long-term historical data that shows markets generally recover.
The Reality: If you have to sell and you’ve been invested through the recent years of good returns, you aren't selling at a loss. You are simply realising a smaller profit.
The reality is at the beginning of April, stock markets (as measured by the MSCI World global index) are back to where they were in October 2025, just six moths ago.
If you have been with the wrong manager in recent years, your portfolio is still likely to be higher than it was worth five or ten years ago. In a VUCA environment, your portfolio has likely built enough of a cushion to withstand the turbulence and still outperform a ‘safer’ alternative such as cash. Don't let the ambiguity of the moment blind you to the gains already in the bank.