Are we out of the woods yet?

After the JSE All Share crashed with 34.2% in FEB/MARCH 2025 it has recovered about 32.8% from its lowest point it reached on 19 March 2025.

I am no rocket scientist, but I don’t think it takes a rocket scientist to question this quick recovery.

We have seen much information showing us that markets usually recover well after a crash. Below is a good illustration of how the markets have recovered in the past:

It is impressive returns, and this usually is very comforting information for investors.

I however fear that this type of information also creates greed among individuals wanting to profit in the short-term and this drives up the market to levels that do not logically make sense.

Due to information being so easily available these days, and various platforms that make share trading very easy, this has caused every second person to trade shares hoping to make a quick buck or two. Which in principle I don’t have any problem with if you use money which you can afford to lose. I do however think that this was one of the largest contributors to this quick recovery.

Below I did an analysis of the same table above but looked at the time it usually takes for markets to fall from its highest point to its lowest point.

We can see that the markets usually take an average of 20 months (shortest ever being 4 months) to reach its lowest point before it starts to turn and eventually becomes the start of a bull run.  This time around (if 19 March 2025 was the lowest point of this crash) it would have only taken 27 days for the market to fall to its lowest point.

This is frightening especially if we consider that the economic impact of this pandemic is only starting to show its effects and will also have a lasting impact on some industries and eventually the consumer.  It also has also caused the government to increase its debts levels to unprecedented levels.

Therefore, I ask the question, are we out of the woods yet, and is it the right time for investors to go all in?

I am not going to answer that question for you but feel free to make your own assumptions taking above into consideration.

Heinrich Coomans | CA(SA) | CFP ® is a director at Affluence Group and specialises in Investments, Personal and Business Insurance.

For any questions please contact him at  heinrich@afgroup.co.za