The Hare and the Tortoise: The perfect parable for your investments in 2026

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Do you want world-beating returns this year, or steady growth until retirement?

In the investment industry in South Africa, there are plenty of managers chasing big returns. While we wouldn’t necessarily describe them as hares, or ourselves as a tortoise, we like to think the evergreen truth in that story applies to your investments.

Consider two Regulation 28 investment funds. Both delivered CPI+6% over 15 years. But one swung wildly, up 25% one year, down 15% the next. The other compounded more steadily.

On paper, that’s the same result. In practice, those are two completely different experiences.

The volatile fund probably tested your nerve constantly. Did you hold through the dips, or did you sell near the bottom and miss the recovery? Unfortunately, most people don't hold tight. The data is clear on this: investors consistently underperform the funds they invest in, because they buy after good years and sell after bad ones.

And if you were retired, drawing income during those down years meant selling more units to fund your expenses, units that weren't there to recover when markets bounced back. This is sequence of returns risk, and it can turn two identical long-term returns into completely different retirement outcomes.

This is where you want the steady fund that lets you sleep at night. It has a better chance of keeping you invested so that your sequence of returns doesn’t sabotage your retirement.

The path matters as much as the destination

At 10X Investments, you be unsurprised to learn we spend a lot of time talking about returns with our clients. But we also go to great lengths to discuss the path those returns took, and whether investors actually captured them.

Often, people don't remain invested through the fullness of time to benefit from long-term returns. Being humans, and having strong emotions, they react. They see a fund lagging for a year or two, and read headlines about what's currently working, and they switch, often locking in losses at exactly the wrong moment.

The best long-term strategy isn't necessarily the one with the highest theoretical return. It's the one you can actually stick with. A slightly lower return that you capture beats a higher return that you abandon halfway through. That 25% gain we mentioned earlier is great, but then you abandon it as it dips 15% next year.

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What 10X Investments has actually delivered

The 10X Your Future Fund has a 17-year track record. As of January 2026, it had delivered 11.3% per year over that period - with inflation averaging around 5%, that's a real return of roughly CPI+6.5%. Over the most recent five years, the real return was even higher: approximately CPI+8.5%.

By any historical standard, these are excellent outcomes. A high-equity balanced fund is typically expected to deliver around CPI+5-6% through a full market cycle. We've delivered at the upper end of that range.

But what doesn't show up in the headline number is that we’ve achieved those returns while being positioned more defensively than many alternatives. We've been underweight US equities (the most concentrated and most expensive equity market in a generation) for some time. We set limits on how far we deviate from our long-term benchmark specifically to avoid extreme underperformance in any period.

The goal isn't to win any given year. The goal is consistent performance that doesn't subject clients to an emotional rollercoaster.

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The hidden cost of concentration

Portfolios that concentrate in whatever's working tend to look great in hindsight. US equities dominated for 15 years, so portfolios overweight US equities showed strong numbers.

But concentration comes with a cost that only shows up when the cycle turns.

When precious metals make up around 30% of the JSE, as they did by late January 2026 after a parabolic run, that's fantastic if the run continues. But parabolic moves tend to correct, often sharply. A portfolio concentrated in what's just worked faces a wide range of outcomes: some investors will get lucky with timing, others won't.

That's not a strategy. That's a lottery with better marketing.

The equity risk premium in South Africa (which is the additional return you're compensated for in taking equity risk over bonds) has compressed dramatically over the past five years. As of early 2026, it sits close to zero. Globally, we see similar patterns: risk premiums have narrowed, meaning investors aren't being paid as much to take on risk. When you're not being compensated for risk, taking more of it isn't brave, it's just risky.

What we're optimising for: our client’s long term retirement outcomes

There's a different way to think about investment success.

Not: did we beat our competitors this year and win a Raging Bull award?

But rather, can this approach compound real returns through different environments, up, down or otherwise? Can clients understand it and stick with it psychologically? Does it work whether the dollar strengthens or weakens, whether US exceptionalism continues or reverts back to the mean?

It’s worth stating explicitly: we don't have a crystal ball. Nobody does. What we do have is a process. Focus on asset allocation (which drives 90% of returns over the long term), diversify across indices, keep costs low, and avoid concentrated bets that require a specific scenario to play out.

When returns are very strong, as they have been over the past five years, it's worth remembering that markets are cyclical. Periods of higher returns are typically followed by periods of lower returns. The goal is to be positioned to compound through both.

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The right questions to ask

The question you should be asking isn't "how did you perform versus other funds?" You don't retire on relative returns. You retire on absolute returns, compounded over time. The right questions are: Did I achieve what I needed? What risk was taken to get there? And can I trust this approach to keep working when conditions change?

CPI+6.5% over 15 years, achieved without betting everything on one outcome. Despite what you might be told, that's not underperformance. That's the job you need done for your retirement, getting done.

The 10X Your Future Fund is our flagship high-equity balanced fund, designed for long-term investors. If you'd like to understand whether it's right for your situation, speak to a 10X consultant.