Beyond the Headlines: A Structured View on Market Volatility
Market volatility is often viewed with apprehension, yet it plays a fundamental role in shaping investment outcomes. At Sigma Private Office, we encourage clients to understand volatility not as a disruption, but as an integral element of the investment cycle.
Periods of uncertainty, whether prompted by monetary policy, geopolitical events, or shifting investor sentiment, tend to reinforce the value of long-term discipline and a diversified strategy. As the headlines continue to report continuing periods of uncertainty, our Investment Committee share with us this week a brief reminder of some of the core investment principles that we follow at Sigma Private Office to help maintain a longer-term view on market volatility:
1. Understanding Market Movements
Corrections, defined as a decline of 10–20%, are not uncommon. They provide natural pauses in market momentum and can reflect temporary sentiment or valuation adjustments rather than a deterioration in fundamentals.
While steeper market declines (termed bear markets) require closer scrutiny, it’s important to note that during corrections, the underlying economic picture often remains intact.
2. Time in the Market, Not Timing the Market
Consistent with our research and client guidance, we advocate for time in the market over tactical attempts to time entry and exit points. Evidence shows that missing even a few days of strong performance can significantly reduce long-term returns.
Investors are best served by remaining invested in a portfolio aligned to their financial objectives and risk profile, especially during periods of heightened volatility.
You can view a more detailed article by our investment committee on this principle here – The Power of Time in the Market, Not Timing the Market – Sigma Private Office
3. Sentiment and Structural Shifts
Recent discussions around de-dollarisation highlight how market sentiment can exaggerate perceived risks. While the topic has drawn attention, we assess this as a sentiment-driven phenomenon rather than a structural shift in the global financial system.
Such themes underline the importance of distinguishing between noise and substance when making long-term investment decisions.
You can view our recent article titled ‘De-Dollarisation in Perspective: Shifting Sentiment, Not Structural Change’ in full here – De-Dollarisation in Perspective: Shifting Sentiment, Not Structural Change – Sigma Private Office
4. Behaviour and Perspective
Emotional responses during periods of volatility can lead to poor decision-making. By remaining anchored to a structured financial plan, investors are better positioned to respond with clarity and confidence.
Key principles include:
- Remaining focused on long-term goals
- Ensuring portfolios are appropriately diversified
- Rebalancing thoughtfully in response to market shifts
- Avoiding reactionary investment decisions
You can view an article by our investment committee on navigating market volatility and common behavioural biases that impact investors here – Investing Amid Market Volatility and Economic Uncertainty – Sigma Private Office
Successful investing isn’t about trying to outguess the market. It’s about investing with time on your side, taking advantage of the long-term growth potential of the market, and allowing your wealth to grow through compounding returns. At Sigma Private Office, we’re committed to helping our clients adopt this philosophy, one that builds wealth slowly and steadily over time, with the discipline, experience and patience needed to weather market fluctuations.
Sigma Private Office operates under the trading name of Sigma Capital Partners MENA Limited. Sigma Capital Partners MENA Limited is regulated and authorised by the Dubai Financial Services Authority (DFSA) (F004667). Sigma Capital Partners MENA Limited’s registered address is Unit OT 18-32, Level 18, Central Park (Commercial) Tower, Dubai International Financial Centre, P.O. Box 507314, United Arab Emirates. Company number: 2843.
