CASPARUS TREURNICHT
MEGAN FRASER
August 2025
Any parent of a small child knows the rare bliss – and undeniable benefits – of a good night’s sleep. For a deeper understanding of why sleep matters so much, Matthew Walker’s Why We Sleep is a must-read. While some old-school hardliners still believe that success comes solely from relentless work and that sleeping more than six hours is a sign of laziness, modern research tells a very different story.
Studies show that getting less than the recommended eight hours of sleep a night can immediately impair mental clarity and reduce productivity. Sleep plays a crucial role in regulating your circadian rhythm, making it essential for a healthy, high-functioning brain. Thankfully, the science of sleep is finally receiving the attention it deserves. In fact, chronic sleep issues and disrupted sleep patterns are now being recognised as bordering on mental illness. And that’s not even taking into account the considerable challenge of parenting a toddler.
It’s probably fair to say that current market conditions are keeping more than a few people up at night. Much of that sleeplessness can likely be traced to heightened volatility and the gaping chasms of uncertainty staring back at anyone in search of certainty or a safe bet.
As an asset manager with a rules-based investment philosophy, we recognise the futility of prediction. In Annie Duke’s book, Thinking in Bets, she suggests that two things shape how our lives turn out: the quality of our decisions and the role of luck.
Annie Duke, a former World Series of Poker champion turned business consultant, advocates that making better decisions starts with embracing uncertainty. For many people, it’s difficult to say “I’m not sure” in a world that values, even rewards, the appearance of certainty. We are discouraged from saying “I don’t know” or “I’m not sure.” We regard those expressions as vague, unhelpful and even evasive. But getting comfortable with “I’m not sure” is a vital step to being a better decision-maker. As Duke explains, a great decision isn’t defined by a great outcome, but by a sound, rational process – one that thoughtfully weighs the best available information and acknowledges what we don’t (yet) know.
Markets have taken off like a Jack Russell through an open gate. Many investors in our houseview funds (Gryphon Prudential and Flexible Funds) are experiencing high levels of discomfort because these funds sitting in cash with no equity exposure. It’s a natural response to feel uneasy when markets surge while you’re sitting on the side-line, especially in a climate already marked by economic uncertainty.
In times like these, it’s worth revisiting a foundational principle: prediction is not a reliable investment tool. As previously observed, forecasting market movements with any consistency remains elusive. Equities may fall (a high-probability, high-impact event), they may rise (lower probability, but potentially high impact), or they may meander sideways for a while (high probability, low impact). In all of these scenarios, short-term decisions driven by emotion can be costly – often more so than the market movements themselves.
Periods of market turbulence challenge even the most disciplined investors. It’s not uncommon to see previously committed investors question their approach when discomfort becomes acute. This isn’t a failure of philosophy – it’s a reflection of human nature.
Annie Duke explains in her book how easily we can be thrown off course when the world feels chaotic. In the language of poker, this state is known as “tilt”: when emotions override reason and decisions become reactive rather than considered. In such moments, long-term thinking is often abandoned in favour of short-term relief. The difficulty is that emotionally-driven decisions tend to lead to poor outcomes, which in turn reinforce the stress and uncertainty, creating a vicious cycle. Recognising the signs of “tilt” in ourselves – whether it’s obsessively checking the market, feeling the need to do something, or second-guessing long-held convictions – can help us break that cycle. Even old-school advice like “take a breath” or “sleep on it” exists for a reason: it helps create space between emotion and action.
Two of the most significant threats to investor wealth are costs and emotions. Having a rules-based investment philosophy removes emotions from the decision-making process and allows investors to sleep well at night, even amid market uncertainty.
Today, as in recent months, uncertainty persists. Our multi asset funds remain invested in local and offshore cash. Cash-heavy portfolios may not satisfy the psychological need for action in rising markets, but they offer capital preservation while positioning for opportunity. When the data-based signals change – and they will – asset allocation shifts can and do happen swiftly.
In times like these, rather than grasping for certainty, there is comfort to be found in staying the course. Just as a good night’s sleep provides clarity and resilience, trusting in a disciplined investment approach and allowing patience to do its quiet work can lead to meaningful long-term rewards and, ultimately, more restful nights.
