According to Ingé Lamprecht, sticking to your long-term investment strategy when the market becomes erratic can be an incredibly difficult exercise – especially if you want to protect an already meagre savings pot.

With indications that the Chinese manufacturing sector is increasingly under pressure, local mining companies took a hit on Friday and the resource index closed 3.5% lower. The share price of Lonmin fell over 18% on the day as reports of job cuts came to light.

Of course, these are fairly extreme examples, but these are the type of fluctuations that equity investors have to stomach. This is much easier said then done.

One of the most common questions asked, is whether a particular investment is safe. Investors are scared to lose money and in the short-term the risk of this happening in the stock market is high.

But this fear should not deter investors from having a significant exposure to equities in the long run when saving for retirement, an educator argues.

Of course, if retirement is on the horizon a very aggressive exposure to equities may not be in the client’s best interest (depending on the specific situation), but even in this instance, care should be taken not to be “recklessly conservative”.

Dave Crawford, CFP® and founder of retirement educator Planning Retirement, says what people often refer to as investment risk is mostly volatility.

He says in many instances the investor is his own worst enemy because worries about potential short-term losses often lead to emotional decisions to sell when the market is low.

“If you go into shares, you either stay in or don’t go in in the first place, because if you are going to worry about fluctuations every day, you are dead… you are absolutely dead in the water,” he says.

Crawford says where investors have a choice about the equity exposure they would like to take on in their retirement fund, they often decide to move the money from a high equity portfolio to cash when markets start falling, thereby crystallising their losses.

This strategy is one of the primary reasons investors can’t sustain their living standard in retirement (assuming they didn’t cash out their retirement benefits along the way).

Crawford says over the long-term volatility is not an issue. What is important is that investments for retirement should outperform inflation and for this to happen a significant exposure to equities is required over time.

“If you can’t sit out those periods [of volatility in stock markets] then equity will always be a problem,” he says.

The table below shows the growth in an investment of R1 000 between 1974 and 2013. The amount shown in the last row is investment growth at inflation during the period.