By Andró Griessel

29 March, 2025

It’s just before 3:00 PM on 11 September 2001, and I’m going about my usual day on the third floor of a former employer, Investec Asset Management (now NinetyOne).

Suddenly, someone exclaims in disbelief: “A small plane has just crashed into the World Trade Center.”

Immediately, everyone scrambles to switch the office TVs from a business channel to a news network—and there it is: smoke billowing from the North Tower, with reports confirming that this was not a small aircraft accident but a terrorist attack involving commercial airliners.

Seventeen minutes later, mere moments after we turned on the news, the second plane strikes the South Tower. Pandemonium and an eerie silence settle over the office at the same time.

At 4:28 PM, with the entire office standing and staring at the television, the first tower collapses. Out of fear that the U.S. stock market will crash, trading is halted for four days.

Nearly 24 years later, I want to engage readers in a thought experiment. Given what happened that day, followed by the 2008 financial crisis (which truly felt like the whole banking system was about to collapse), South Africa’s own “Nenegate,” and the Covid-19 pandemic: How, or rather where, would you have invested your money with the advantage of hindsight?

While the common investment advice of “just keep investing despite the circumstances” is not bad advice, this exercise is not about reinforcing that principle. Instead, it aims to uncover any structural biases in our perception of financial markets.

I challenge you to grab a pen and paper and join me in this exercise.

There are ten markets to choose from, listed alphabetically: Australia, Brazil, China, Germany, India, Japan, South Africa, Thailand, the United Kingdom, and the United States. In the graph below, each market is represented by a letter from A to J.

Now, rank them in order from best to worst performer after you’ve looked at the graph. Don’t look at the answers below before you’ve made your list or at least tried to arrange the order in your head.

In first place

Let’s start at the top. If you guessed the U.S. was the best performer, you’d be wrong. The U.S. ranks sixth (F) with a total return of 624% in dollar terms.

In last place

If I asked you where you think South Africa ranked over this period, you would be excused if you’d have guessed last or second-last (I or J). But in reality, South Africa ranks second (B) with a return of 929% in dollar terms. Quite a surprise, isn’t it?

Let’s not keep you waiting any longer—here are the actual rankings:

• A = India (1,458%)
• B = South Africa (929%)
• C = China (845%)
• D = Thailand (777%)
• E = Australia (642%)
• F = USA (624%)
• G = Germany (494%)
• H = Brazil (406%)
• I = United Kingdom (262%)
• J = Japan (206%)

What’s the lesson?

This list includes five emerging markets and five developed markets. Four of the top five performers are emerging markets, with India emerging as the overwhelming winner.

Emerging markets are certainly more volatile than their developed counterparts, but over time, investors have been handsomely rewarded for enduring the ride.

However, if you had simply chased the performance over the past seven years, you would have lost 50% of your money in dollar terms over the next 16 years. Investing is a marathon, not a sprint, and periodic adjustments to asset allocation are crucial.

We often see charts showing how the U.S. has outperformed other markets over the past 10 to 15 years. But was this obvious back in late 2012 (halfway through our experiment)?

As of October 2012, Thailand (which seems to be where Kleuterzone’s headquarters are located, from what I can tell) was leading comfortably with 866% growth over the prior 12 years, while the S&P 500 index was second-last, with a meagre 67% return.

Halfway through the marathon (or probably half-marathon), emerging markets were far ahead of developed ones. As the saying goes, they were “the only game in town.”

However, if you had simply maintained the status quo for the following 12 years, your outcome would have been disappointing, unfortunately. Since 2012, the tables have turned completely—except for India.

Over those 12 years, the S&P 500 is in first place with a 334% return, while the JSE ranks sixth with just a 70% return. Thailand, the superstar of the previous decade or so, delivered a negative return of -9%. In Brazil, you would have ended the decade with 15% less than you started with.

Here is my challenge to those who advocate for investing all your money offshore or clients who instruct their advisors to move as much capital overseas as possible: Could you be a bit more specific? The world consists of more than just South Africa and the U.S.

Which markets should we invest in, and in what proportions, to achieve a satisfying return? Is a random allocation to the MSCI World Index the best approach?

At Woodland Wealth, we don’t think so, as this strategy automatically results in 70% exposure to the U.S. This approach has worked exceptionally well over the past 12 years, but we don’t believe it will work for the next decade.

As always, my advice is not to get too caught up in the flavour of the day, who the president of which country is, or what the unemployment or GDP growth rate is. Instead, focus on company valuations and where dislocations exist between actual business performance and the herd mentality of market participants.

Andró Griessel is a certified financial planner at Woodland Wealth. Contact him at info@woodlandwealth.co.za.

Although all possible care has been taken in the preparation of this document, the factual correctness of the information contained herein cannot be guaranteed. This document does not constitute advice and anyone who intends to take any financial action based on this document is strongly advised to first consult with his/her personal financial advisor. Woodland Wealth is an authorized financial service provider with FSP no. 5966.