EDITORIAL: Don’t bother panicking about financial markets

At first glance, the JSE all share index seems a relative outperformer in this year’s market carnage: just 13.5% down compared with the MSCI world equity index’s 25% crash, or the S&P 500’s 23.8% tumble. But if you take the savaging in world currency markets into account, which has spared nothing, not least the rand, local investors are 24% poorer in dollar terms.

It’s tempting to succumb to peak pessimism — not least when publications such as The Economist tell you the world is in a dangerous new phase where the options are bad, bad, and bad.

The good news is, it’s too late to panic. Rather keep a cool eye on the upcoming earnings season, which should provide a far less emotional guide to what is really happening in financial markets. 

To date, few companies have collapsed under the strain of rampant inflation, due partly to a once-in-a-century pandemic and the Russia-Ukraine war.

The fact is, global and local companies that survived the pandemic are the stronger for it. And they’ll do what companies do: navigate through hard-to-call situations to ensure their own survival. Betting against that is foolhardy.