24/07/2025
Investment update
Volatility brings opportunity
The Financial Markets have been bumpy and volatile to date this year – some of the reasons have been: Chinese AI entered the market, which questioned the US’s role in future AI development, tariffs were introduced, the US and Israel’s conflict against Iran created a lot more political unrest; these are just a few unprecedented events. Markets have largely recovered from all of these.
Markets try and anticipate what is happening going forward – always future focused – I,e tariffs are still an issue now, but the markets have already taken this into account. Companies are saying that the effects of tariffs are lower than expected; they will be able to work around a lot of it by moving production to areas with lower tariffs or increasing prices slightly, so they are saying they are still in relatively good shape. Investment managers are still expecting volatility to be present – long-term means they look at multiple years ahead. Often, volatility means that the price drops on very good value companies, so the volatile conditions allow purchase of great, high-quality, strong growth prospect companies at attractive prices.
Some providers have had success coming from investments in Nvidia, which dropped to around $100 per share and are now worth $150 to $160 per share. Another success was had by those who invested in Meta, after it faced great market pessimism; shares were able to be picked up at $500 a share, and are now trading north of $700 a share.
Members often panic; they want to change from higher-risk funds to conservative funds. Often, the advice is to stay the course, as volatility tends to be short-term – KS is a long-term investment.
It's important to understand that investment accounts are not savings accounts. Often investments have higher long-term returns, however see volatility throughout the investment period.
