Article
ArticleWhy investors shouldn't mistake short-term setbacks for a slippery slope
Gabriel Sacks, Co-Manager of abrdn Asia Focus, explores why resilience is key to long-term investing success, especially in Asia’s smaller companies.
Author
Gabriel Sacks
Investment Manager, abrdn Asia Focus plc
Duration: 4 Mins
Date: 24 Sept 2025
What would you think if I were to say resilience is one of the most important attributes an investor can possess? More specifically, what would you think if I were to suggest it can be particularly useful in a market such as Asia?
You might infer that investing must be a dispiriting exercise, not least in the region in which my colleagues and I specialise. You might even conclude that it must be a matter of somehow triumphing in the face of overwhelming odds.
Thankfully, the point I want to make is rather more upbeat. I believe resilience is essential because successful investing is usually rooted in taking a long-term view and accepting setbacks are inevitable but eminently surmountable.
I thought about this recently when contemplating one of my sporadic forays into the world of skiing. It goes without saying that most skiers, whatever their level of proficiency, suffer some painful tests of character.
Hermann Maier offers one of the most remarkable illustrations. The Austrian multiple champion amassed 54 World Cup race victories in the 1990s and 2000s, but his stellar career was not without incident.
In 2001, while riding his motorbike home after a training session, Maier collided with a car. His right leg was so badly injured that doctors considered amputation. Extensive reconstructive surgery was eventually carried out.
Hardly anyone expected a return to action, let alone a full-blown comeback, yet Maier re-entered top-level competition a little over a year later. Within two weeks, sensationally, he added to his tally of World Cup wins. In light of his apparent indestructibility, fans dubbed him “The Herminator”.
Investing very rarely serves up such extremes, of course. Neither the lows nor the highs are likely to be so pronounced. But there are bound to be ups and downs, with the latter occasionally testing patience and resolve.
For example, imagine seeking out the brightest opportunities among Asia’s smaller companies. This is likely to mean venturing into relatively unfamiliar territory – not just in terms of region but in terms of asset class – for most investors.
Some might be immediately deterred by the fact that Asia is home to numerous emerging markets (EMs). Wherever they may be, EMs are often perceived as inherently risky and unstable.
The paucity of information on smaller companies could also be a source of discouragement. A small-cap business in Asia is likely to be covered by just a handful of analysts – or very possibly by none at all.
Fortunately, these initial hurdles are not difficult to overcome. They barely amount to taking a gentle tumble on the nursery slopes.
The truth is that EMs are nowadays seldom defined by instability. A key lesson of the past few years is that volatility and uncertainty can be found pretty much everywhere – not just in EMs but in their developed counterparts – and the consequences tend to be short-lived.
The analysis gap also need not be a problem. Investment teams such as ours are able to draw on our own in-depth research – including first-hand, on-the-ground insights – to learn more about the attractions of companies at the lower end of the market-capitalisation spectrum.
Naturally, there are instances when we might dig pretty deep before discovering a business’s ostensible appeal fails to withstand ever-closer scrutiny. This can be frustrating.
There are also instances when, for whatever reason, a holding may prove incapable of generating the kind of growth and performance for which we originally hoped. This can be disappointing.
Yet such is the way of investing. Moments of frustration and disappointment are inevitable. Resilience lies in recognising the value of dusting yourself down, ploughing on and learning to live with short-term noise and fleeting dissatisfaction.
Historically, smaller companies have outperformed their larger counterparts over time . This acknowledged trend, which has been evident both in Asia and elsewhere, continues to underpin the investment philosophy that drives abrdn Asia Focus plc.
No strategy is infallible, because markets are themselves imperfect. So is the information that shapes them.
But strategies that are able to benefit from a diligent stock-picking process and sensible but agile portfolio management are likely to succeed over the long run, despite the many twists and turns that punctuate every investment journey. Our own performance record clearly demonstrates as much.
Incidentally, in case you may be wondering, I will spare you the details of my latest skiing exploits. Suffice to say that resilience was once again a useful quality to possess. As The Herminator himself may well have said: “I’ll be back.”
You might infer that investing must be a dispiriting exercise, not least in the region in which my colleagues and I specialise. You might even conclude that it must be a matter of somehow triumphing in the face of overwhelming odds.
Thankfully, the point I want to make is rather more upbeat. I believe resilience is essential because successful investing is usually rooted in taking a long-term view and accepting setbacks are inevitable but eminently surmountable.
I thought about this recently when contemplating one of my sporadic forays into the world of skiing. It goes without saying that most skiers, whatever their level of proficiency, suffer some painful tests of character.
Hermann Maier offers one of the most remarkable illustrations. The Austrian multiple champion amassed 54 World Cup race victories in the 1990s and 2000s, but his stellar career was not without incident.
In 2001, while riding his motorbike home after a training session, Maier collided with a car. His right leg was so badly injured that doctors considered amputation. Extensive reconstructive surgery was eventually carried out.
Hardly anyone expected a return to action, let alone a full-blown comeback, yet Maier re-entered top-level competition a little over a year later. Within two weeks, sensationally, he added to his tally of World Cup wins. In light of his apparent indestructibility, fans dubbed him “The Herminator”.
Investing very rarely serves up such extremes, of course. Neither the lows nor the highs are likely to be so pronounced. But there are bound to be ups and downs, with the latter occasionally testing patience and resolve.
For example, imagine seeking out the brightest opportunities among Asia’s smaller companies. This is likely to mean venturing into relatively unfamiliar territory – not just in terms of region but in terms of asset class – for most investors.
Some might be immediately deterred by the fact that Asia is home to numerous emerging markets (EMs). Wherever they may be, EMs are often perceived as inherently risky and unstable.
The paucity of information on smaller companies could also be a source of discouragement. A small-cap business in Asia is likely to be covered by just a handful of analysts – or very possibly by none at all.
Fortunately, these initial hurdles are not difficult to overcome. They barely amount to taking a gentle tumble on the nursery slopes.
The truth is that EMs are nowadays seldom defined by instability. A key lesson of the past few years is that volatility and uncertainty can be found pretty much everywhere – not just in EMs but in their developed counterparts – and the consequences tend to be short-lived.
The analysis gap also need not be a problem. Investment teams such as ours are able to draw on our own in-depth research – including first-hand, on-the-ground insights – to learn more about the attractions of companies at the lower end of the market-capitalisation spectrum.
Naturally, there are instances when we might dig pretty deep before discovering a business’s ostensible appeal fails to withstand ever-closer scrutiny. This can be frustrating.
There are also instances when, for whatever reason, a holding may prove incapable of generating the kind of growth and performance for which we originally hoped. This can be disappointing.
Yet such is the way of investing. Moments of frustration and disappointment are inevitable. Resilience lies in recognising the value of dusting yourself down, ploughing on and learning to live with short-term noise and fleeting dissatisfaction.
Historically, smaller companies have outperformed their larger counterparts over time . This acknowledged trend, which has been evident both in Asia and elsewhere, continues to underpin the investment philosophy that drives abrdn Asia Focus plc.
No strategy is infallible, because markets are themselves imperfect. So is the information that shapes them.
But strategies that are able to benefit from a diligent stock-picking process and sensible but agile portfolio management are likely to succeed over the long run, despite the many twists and turns that punctuate every investment journey. Our own performance record clearly demonstrates as much.
Incidentally, in case you may be wondering, I will spare you the details of my latest skiing exploits. Suffice to say that resilience was once again a useful quality to possess. As The Herminator himself may well have said: “I’ll be back.”
Important information
The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested.
Past performance is not a guide to future results.
Emerging markets tend to be more volatile than mature markets and the value of your investment could move sharply up or down.
Other important information:
Issued by abrdn Fund Managers Limited, registered in England and Wales (740118) at 280 Bishopsgate, London EC2M 4AG. The company is authorised and regulated by the Financial Conduct Authority in the UK.
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