Market chaos isn’t new – here’s how rationale investors beat the cycle
Karl Rogers, the chief investment officer at Elkstone, gives Business Post readers his insights into how investors can navigate market chaos.
In times of market turmoil, rationality often becomes the first casualty. Yet history shows that emotional decision-making during crises consistently undermines returns. Recent weeks have tested investors’ resolve, as geopolitical tensions, sweeping US tariffs, and surging volatility upended complacent strategies. However, there are ways to stay grounded when markets lose their footing.
In response to heightened market volatility following President Trump’s sweeping tariff announcements, a new investor memo emphasises the importance of maintaining rationality amid emotional market swings. The memo explores recent macroeconomic shifts, capital market reactions, and the psychological forces at play during uncertain times.
Drawing on personal insights and historical market parallels, Karl underscores how investor behavior often deviates from the rational models economists assume. The memo reminds readers that while market catalysts differ, from pandemics to financial crises to policy-driven shocks, the emotional responses driving market cycles remain consistent.
It challenges the reliability of forecasts, arguing that accurate predictions are nearly impossible due to the sheer number of unknown variables. Instead, the focus should be on understanding investor psychology and portfolio positioning across the defensive-to-aggressive spectrum.
With volatility elevated and forecasts clouded by political maneuvering, the call is for patience and perspective. Investors are urged to resist reactionary moves and instead stay disciplined, acknowledging the cyclicality of markets and the behavioral biases that can lead to costly mistakes.
Read the full article from Elkstone’s Chief Investment Officer, Karl Rogers, on the Business Post
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