Owning a basket of great businesses does not always lead to diversified outcomes. When many of those businesses depend on the same market conditions, portfolios can behave far more similarly than investors expect. Quality investing is one of the most trusted long-term investment approaches. It focuses on companies with strong balance sheets, dependable profits and leading positions in their industries. These businesses are often well-known, widely used and form part of everyday life.

Investing is both a science and an art. The science of investing can be learned in books, the classroom, and by following your curiosity online. Understanding inflation, interest rates, asset allocation, and legislation gives you the foundation for becoming a successful investor. But it’s the art of investing that will ultimately determine your success. And the art of investing cannot be learned in a textbook. It gets taught to us by the events we live through.

A few years ago, when Russia announced that it had just invaded Ukraine, a whole series of scenarios loomed large, making markets jittery. Unsurprisingly, a lot of investors were worried and considering withdrawing investments – ‘just until things settle down’.