By Werner Gerber, CFA® | Founder, ClearGauge Wealth
ClearGauge Wealth (Pty) Ltd is an Authorised Financial Services Provider (FSP No. 55826).
Last fact-checked: 10 August 2026
Quick Answer
In brief A plan cannot avoid every market fall. A strong plan is less likely to force a harmful choice during a fall. It keeps near-term needs apart from long-term risk. It avoids too much reliance on one result. It has review rules before stress hits. This does not guarantee results or prevent losses. It can make the trade-offs clear.
Visual Summary
Note This table gives general education. The guide gives no asset mix, product or trade.
| Resilience test | Why it matters | What to check |
| Near-term cash needs | A market fall is harder when essential spending is due. | Known costs, emergency cash and the date money is needed. |
| Concentration | One company, sector, country or asset type can fail at a bad time. | Large holdings, employer shares, property, debt and fund overlap. |
| Debt and access | Borrowing or limited access can turn a fall into pressure to sell. | Loan terms, repayments, withdrawal rules and other sources of cash. |
| Review rules | A plan can be changed by fear if no rule exists in advance. | What facts would justify a review, rebalance or change in spending. |
Decision Framework
1. Give Near-Term Needs Their Own Plan
Start with money that has a date. An emergency, tax bill, school cost, loan payment or planned retirement draw may not wait for markets to recover. If such needs rely only on assets that can fall fast, a downturn can force a sale.
This does not mean every spare rand should be cash. It means each amount needs a clear purpose and date. Money needed soon has a different job from money for a goal many years away.
2. Match Risk to the Time Available
Long-term capital may need growth to keep up with future costs and inflation. It can also fall in value. The key question is not whether a fall can happen. It is whether the plan can carry on if a fall happens before the goal date.
A risk level is easier to keep when it fits the household’s cash needs, other income and ability to wait. A plan that looks right on a calm day may not work if it causes a rushed sale on a hard day.
3. Look for One Point of Failure
A plan can have many account lines but still rely on one result. A large employer share, one sector, one property market or high debt can expose a household to the same shock in several ways. Diversification can cut this reliance. Broad market risk remains.
Look through funds as well as direct holdings. A new fund may repeat shares, sectors or countries held elsewhere. The aim is not to own everything. It is to know which event could hurt too much of the full plan.
4. Set Rules Before Stress Arrives
A market fall can make a recent price seem like new news. Before you change anything, return to why the holding was added, its time frame and the cash need it serves. A written review rule can slow a choice driven by fear or headlines.
A rule does not mean that you never act. It can name a life change, cash-flow gap, debt change or risk limit that would justify a review. The point is to check facts, not predict the next market move.
Key Concepts
Resilience Is Not the Same as Avoiding Losses
Every mix can still face market falls. Trying to become crash-proof after a fall can create other risks. You may miss a recovery. Inflation can cut buying power. You may keep too much money in cash. A strong plan balances these risks. It treats more than one risk as important.
Liquidity and Value Are Different
An account balance or property value is not the same as cash ready to use. A sale can take time, cost money or happen in a weak period. Check how you would pay essential costs. Some assets may be hard to sell on good terms.
Retirement Income Needs an Extra Check
Someone who draws income from investments may face a different timing risk from someone still saving. In a living annuity, income is not guaranteed. The investor carries investment and longevity risk. Review the income plan, drawdown and assets together.
Worked Example
Illustration only. Assume a household needs R300,000 for a known cost in two years. It also has a retirement goal fifteen years away. If both goals are in volatile shares, a market fall could affect the short-term payment when it is due. The example does not set an asset mix. It shows why goals with different dates may need different risk checks.
The household would still need to consider income, debt, emergency cash, tax, fees, other investments and whether the date can move. A general example cannot decide which assets, funds or amounts suit that household.
Reality Check
Use these questions before you change a plan after a market fall:
- Which costs must be paid in the next one to three years? Where will the cash come from?
- Could a fall in one company, sector, property market or employer affect more than one part of the household plan?
- Do debt payments, withdrawal rules or selling costs put pressure on you to act at the wrong time?
- What fact has changed: the goal, cash flow, time frame, ability to bear risk or only the market price?
A review is not a sign to react to each market move. It tests whether the facts behind the plan are still true.
Common Mistakes
Trying to Call the Next Crash
It is hard to predict the timing and depth of market falls. A forecast does not replace a cash, risk and review plan.
Treating Cash as a Complete Answer
Cash can help with a near-term need. Holding too much for too long can create inflation and reinvestment risk. The job and date of the money still matter.
Ignoring Debt and Spending Needs
A plan cannot be judged apart from loan payments, spending, tax and other needs. These may force a household to sell during a downturn.
What This Framework Does Not Decide
This guide sets no asset mix, fund, provider, product, drawdown or transaction. Market falls remain unknown, and the guide gives no buy or sell timing. Personal advice needs the household’s goals, financial position, experience, ability to bear risk, tax and product terms.
Frequently Asked Questions
Can diversification stop losses?
No. It can reduce concentration risk, but broad markets can still decline together.
Should I sell before a crash?
Predicting the timing of market falls time after time is hard. A pre-agreed risk and cash plan may be more useful than a forecast.
What should I do during a market fall?
Check the goal, cash access and first assumptions before you make changes. Emotion is not evidence.
Does a retirement portfolio need different checks?
It may. Income withdrawals, time frame and other steady income can change the effect of a market fall. Consider the income plan and investments together.
Financial Clarity Review
A practical next step Gather the documents and facts that affect this choice. Then test the options against your goals, cash flow, time frame, costs, tax and risks. If the choice is major, consider getting advice that fits your situation.
Continue Exploring
Continue with How Much Offshore Exposure Should South Africans Have?, How Do Interest-Rate Changes Affect My Investment Portfolio?, Why Do Investors Underperform Their Funds?, and How Often Should I Review My Investment Portfolio?
Sources and Further Reading
Primary sources were checked on 10 August 2026 where this article uses time-sensitive regulatory, tax, retirement or market-structure information. Recheck all rules, limits and product terms immediately before publication.
- South African Government: FAIS General Code of Conduct
- ASISA: Living-annuity guidance and retirement-income context
Important Disclosure
General information only
This article is provided for general educational and informational purposes only and does not constitute financial, investment, tax or legal advice. The examples and illustrations are based on assumptions that may not apply to your circumstances and are not guarantees of future outcomes. Before making a financial decision, consider obtaining advice appropriate to your objectives, financial situation and needs.