Form Is Temporary, Class Is Permanent: Lesson for investing

A couple of months ago, my inbox was chockablock with emails from clients after Trump fired up his tariff threats and share markets tanked 14% in what felt like minutes.

The emails fell into two camps. On one side, clients saw the forest through the trees and wanted to be opportunistic with the volatility. They wanted to put new money into the market while everything was on sale.

But on the other side, I had clients panicking with questions like: “My investments have gone down significantly. Should we panic about Donald Trump?” “Should we move everything to cash?” “Is he going to cause a recession or depression?”

The reality is we aren’t sure what Trump will do. But, in this case, he folded, living up to the TACO saying: Trump Always Chickens Out. He put a pause on the tariffs. And what happened? The market rallied back to where it was, and the emails stopped flowing in.

Lessons from history

The image is famous and dates back to the aftermath of the 1929 Wall Street Crash during the Great Depression. The 1987 crash has similar iconic imagery of people on Wall Street with their heads in their hands.

Some people genuinely did lose their life savings during these crashes. The human cost was real and devastating for those caught up in the panic.

But what I want to bring to your attention is the fact that the market has always recovered.

One thing I always point to and reference with clients is the Vanguard Volatility Chart. It shows share markets over 40 years, with all the asset classes you can own. This chart has all these dot points along the top showing all the times in history when something major happened.

You’ve got the Asian currency crisis, the dot-com bubble burst, September 11 terrorist attacks, the GFC, Brexit, COVID-19 outbreak, and yes – Donald Trump’s been in power before. We’ve had periods of high inflation, high interest rates, wars, pandemics, and every other crisis you can imagine.

Each of these events felt like the end of the world at the time. Each one had people convinced “this time is different.”

But look at that chart. Through all of it – every recession, every crash, every geopolitical mess – the long-term trend keeps climbing up and to the right. The answer is simple: stuff happens. But history repeats, and quality assets always bounce back.

There’s a footy saying I really love: “Form is temporary, class is permanent.”

In sporting terms, this means a champion player might have a few off games, miss some easy shots, or even have a terrible season. But if they’re truly class – if they have the fundamental skills, talent, and character – they’ll bounce back. The poor form is just a temporary blip. The underlying quality always shines through eventually.

It’s the perfect way to think about investing, especially when markets go haywire. If your assets are of good quality – solid businesses, strong fundamentals, proven track records – these market declines will be temporary. The businesses are still making money. People still need their products and services. The underlying value is still there, even when the share price takes a temporary hit.

The poor market performance is just form. The quality of the assets – that’s permanent.

Donald Trump’s been in power before. We’ve had periods of high inflation, high interest rates. The answer is simple: stuff happens. History repeats.

The market rewards patience, not predictions. Invest consistently, ignore the noise, and let time work its magic. 

Your future self will thank you for it.

Any questions or concerns?

If you’re ready to take the first step, it all starts with having a conversation about your financial goals.

Cheering you on!

 Certified Financial Planner®, Director

Apex Advice – Geelong Financial Advisers for professionals and tradies who want to organise, grow and spend their money with confidence.

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Note: The information contained in this update has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs.

You should seek advice before making any decision regarding any information, strategies or products mentioned to consider whether that is appropriate to your own objectives, financial situation and needs.