If you’ve been following the news lately, it probably feels as if oil prices, war headlines and market volatility are everywhere again.

When geopolitics flare up, markets react fast — and investors often react faster.

But a useful question to ask is not “What’s happening right now?”
It’s “How do markets expect this to play out over time?”

Recent commentary shared by Old Mutual Investment Group, BlackRock and Investec helps separate fear from facts.

OMIG’s Director of Investments, Hywel George, recently shared a short explainer on how markets are interpreting the Iran conflict and oil price reaction.

👉 Video explainer: Hywel George – Markets, geopolitics & oil impact

Key message:
Markets currently view the economic impact of the conflict as serious but likely short‑lived, rather than a structural shock.

BlackRock’s Global Chief Investment Strategist, Wei Li, highlighted an important technical signal:

👉 Oil futures are in “backwardation” — meaning near‑term prices are higher than longer‑dated contracts.

This is typically a sign that markets expect temporary disruption, not permanently higher oil prices.

Investec Chief Economist Annabel Bishop published a detailed note titled “Brent on the Brink”, directly addressing fears around sustained oil price spikes.

👉 Investec analysis:

Key takeaways:

While markets are digesting these developments rationally, investors often struggle more than portfolios do.

When headlines are dramatic, a very human instinct kicks in:

“I should do something.”

This action bias frequently leads to:

History consistently shows that emotional reactions cause more long‑term damage than short‑term events.

This is where diversification stops being theoretical and becomes practical.

As Hendrik Pfaff, CIO of PWM Wealth Management, regularly explains:

Diversification isn’t about maximising returns every year —
It’s about minimising regret and improving consistency over time.

Here is a link to an article from our Wealth Management Team: NAVIGATING A CHALLENGING START TO 2026: WHY DIVERSIFICATION MATTERS MORE
THAN EVER

Well‑diversified portfolios are not designed to shine in headlines.

They are designed to be:

Oil spikes. Wars dominate news cycles. Markets wobble.
And yet, disciplined investors are often surprised by how little these events matter over time.

Good advice isn’t about predicting oil prices, wars or markets.

It’s about:

Or simply put:

“Relief is temporary. Discipline is compounding”.

I always enjoy reading Warren Buffett’s annual letter to Berkshire Hathaway shareholders. Beyond the investment insights, readers valued his honesty, humility, and willingness to admit what he didn’t know or where he made mistakes.

Berkshire Hathaway has long been a core holding in our PCS Stockbroking discretionary offshore portfolios, delivering an 11.43% return in USD terms during 2025.

This year marked the first shareholder letter from new CEO Greg Abel. While he did not attempt to replicate Buffett’s warm, conversational style, his message was clear: Berkshire’s culture and philosophy remain unchanged.

Abel described Buffett as “arguably the greatest investor of all time” and acknowledged that he is “a very hard act to follow.” He emphasised that Berkshire’s values and culture will “remain unchanged and continue into perpetuity,” echoing Charlie Munger’s words from 2021 that “Greg will keep the culture.” Abel noted this as a reminder that culture is Berkshire’s most treasured asset.

On share buybacks, Abel reaffirmed Berkshire’s long‑standing approach:

“We will buy back Berkshire shares when they trade below our estimate of intrinsic value, conservatively determined.”

There were no share buybacks in the fourth quarter, extending a pause that began in May 2024. Abel also confirmed that Berkshire will continue not to pay dividends, maintaining Buffett’s view that retained earnings should only be distributed if they cannot create more than one dollar of value per dollar retained.

Berkshire’s cash balance declined slightly to $373.3 billion, representing roughly 30% of the balance sheet.

This figure often draws attention — and occasionally concern — especially when viewed through sensational headlines. However, Abel described this cash position as “dry powder,” stressing that it provides resilience and flexibility, not caution or retreat.

He also reminded shareholders that Berkshire’s cash holdings have historically been misunderstood:

“Our substantial liquidity enables us to respond swiftly when opportunities arise.”

From my perspective, a 30% allocation to cash and bonds, alongside 70% equity exposure, is also a sensible structure for many PWM clients through our Balanced and Dynamic funds — provided they are comfortable with long‑term equity risk.

One statement from the letter stood out as particularly relevant for portfolio construction:

“We maintain a fortress‑like balance sheet… using debt sparingly and prudently, preserving liquidity to withstand adverse conditions and seize opportunities.”

This principle strongly aligns with how we think about client portfolios, diversification, and risk management, and ties directly into the views shared in the second and third attachments.

In short:
It was a different letter, but one that clearly preserves Berkshire’s legacy — disciplined, patient, and focused on long‑term value creation. Here is a link to the full article.

Earlier this week, the News24 FundHub Awards recognised top-performing funds over 5‑ and 10‑year periods. While not the industry’s premier awards (that remains the Raging Bull Awards), they do provide useful confirmation of long‑term consistency among several funds we already use in client portfolios.

These results closely reflect how our portfolios are already positioned:

In short:
The awards do not change our strategy — they validate it. Long‑term performance, disciplined process, and consistency across market cycles remain the cornerstone of how we construct and manage client portfolios.

Feeling uneasy when markets are noisy is normal.

The goal isn’t to feel nothing —
It’s to avoid letting feelings drive decisions.

That’s exactly why diversified portfolios and disciplined advice exist in the first place.