Think back over this year and count the moments when selling felt like the sensible, grown up thing to do.
The market fell through the March quarter. Conflict in the Middle East pushed energy prices around and rattled sentiment. The mining sector dropped more than fourteen per cent inside a single month. The Reserve Bank put rates up three times and then sat at 4.35% telling anybody who would listen that the inflation fight was not finished.
Every one of those was real. None of them was invented by the media. A reasonable person reading the paper in March could have made a considered, articulate case for going to cash.
And the twelve months to the end of that quarter still finished up nearly twelve per cent.
The reasons to sell always sound smarter
This is the part that catches people, and it has nothing to do with intelligence.
A case for selling is specific. It names a war, a sector, a number, a central bank. It has detail and it has urgency and it sounds like somebody has done their homework.
A case for staying invested is general. It talks about decades, averages and discipline. It sounds like somebody who has not been paying attention.
So the sell case wins the argument in your head, almost every time, even when it loses the decade.
What it actually costs
Nobody who goes to cash intends to stay there. The plan is always to step back in when things settle down.
The trouble is that markets do not ring a bell. Recoveries tend to arrive while the news is still bad, because prices move on what people expect next, not on what has already happened. By the time it feels safe, a large part of the recovery has already happened without you.
You end up having sold in the fear and bought back in the relief. That is the expensive order to do it in.
The bit nobody says out loud
It is not the volatility that costs people money. It is the decisions they make because of the volatility.
A portfolio that falls and recovers costs you nothing but discomfort. A portfolio you sold on the way down costs you the recovery.
I have watched this through 1987, the dot com collapse, the GFC, COVID and everything since. The pattern does not change. The headlines change and the fear feels new every time.
Why the plan comes first
This is the whole reason we build the plan before anything else, and why we spend time on a proper risk profile rather than a quick guess.
The point of a measured risk profile is that you decide how much volatility you can live with while you are calm, and you write it down. Then when March arrives, the decision has already been made by a more rational version of you.
The defensive part of the portfolio is not there to be exciting. It is there so that pension payments and drawdowns can come from the stable side, which means a poor quarter in shares never forces you to sell shares at the worst possible moment.
That is not a clever trick. It is just structure, built in advance, so that the worst week of the year is not also a decision point.
If this year has unsettled you
If you have spent 2026 wondering whether you should be doing something, that is worth a conversation.
Not because there is necessarily anything to change. More often than not there is not. But “should I be doing something” is a much easier question to live with once somebody has shown you the modelling and you can see the answer for yourself.
Fifteen minutes is usually enough to know whether it is a real question or just a noisy one.
Past performance is not a reliable indicator of future performance.
