Right now, it feels like investors are being hit from every angle.
Ongoing conflicts in regions like Ukraine and the Middle East are creating uncertainty. Energy markets remain volatile, fuelling concerns about inflation. And here in Australia, cost of living pressures are at the forefront of households' minds.
When headlines are dominated by fear, it becomes harder to stay optimistic — and even harder to stay consistent with an investment plan.
Yet history suggests this is exactly when simple strategies matter most.
Markets have always climbed a wall of worry
It is easy to believe that "this time is different".
The current backdrop — geopolitical tensions, rising fuel costs, and inflation — feels uniquely challenging. But zooming out tells a very different story.
Over the past century, equity markets in both Australia and the United States have navigated:
- World wars
- Oil shocks
- Financial crises
- Pandemics
- Political instability
And yet, broad indices like the S&P/ASX All Ordinaries Index (ASX: XAO) and major US benchmarks have continued to trend higher over time.
This phenomenon is often described as the "wall of worry" — markets advancing despite a constant stream of negative news.
The key insight is simple: short-term fear is persistent, but long-term progress in businesses and economies has historically been more powerful.
The strategy that gets hardest when it matters most
Dollar-cost averaging is often described as one of the simplest ways to invest.
Invest regularly. Ignore short-term noise. Let time and compounding do the heavy lifting.
But the reality is more nuanced.
This approach becomes most difficult during market declines — precisely when it is most powerful.
When markets fall, sentiment weakens. Confidence drops. The instinct to pause or wait for clarity kicks in.
Yet those periods often produce the most attractive long-term entry points.
Buying when prices are lower sounds easy. Continuing to do so when the news cycle is negative is where discipline is tested.
A practical framework: building a core and adding conviction
One way to stay grounded through volatility is to structure a portfolio deliberately.
A commonly used approach is the core and satellite strategy — a framework that balances stability with opportunity.
The core: broad exposure that does the heavy lifting
At the centre of the portfolio sits a diversified foundation, typically built using broad-market ETFs.
For Australian investors, that often includes:
- Vanguard MSCI International Shares ETF (ASX: VGS) – exposure to around 1,500 global companies
- BetaShares Australia 200 ETF (ASX: A200) – coverage of Australia's largest listed businesses
- iShares S&P 500 ETF (ASX: IVV) – access to leading US companies
- VanEck Morningstar Wide Moat ETF (ASX: MOAT) – focused on businesses with durable competitive advantages
These types of holdings are designed to capture long-term economic growth across markets, sectors, and geographies.
They are not about chasing the next big winner. They are about participating in the broader progress of global business over time.
The satellites: targeted ideas around the edges
Around that core, investors can allocate a smaller portion to higher-conviction ideas.
This could include individual companies or thematic ETFs such as:
These positions bring focus and potential upside, particularly in areas benefiting from structural tailwinds like digital security, defence spending, or large-scale technology adoption.
The key is proportion.
The core provides stability and consistency. The satellites introduce variability and opportunity.
Why this approach fits today's environment
In uncertain periods, complexity often increases.
Investors are tempted to react — shifting allocations, chasing trends, or waiting for clarity that rarely comes.
A structured approach helps cut through that noise.
- The core ensures you remain invested in long-term growth
- The satellites allow you to express views without overexposing your portfolio
- Dollar-cost averaging keeps capital flowing consistently
Importantly, this framework does not rely on predicting macro events — something even professionals struggle to do consistently.
Foolish takeaway
The current environment feels challenging, but uncertainty has always been part of investing.
Markets have moved forward through decades of conflict, inflation shocks, and economic cycles.
For investors, the real edge often comes from consistent behaviour.
Simple strategies like dollar-cost averaging, combined with a clear core and satellite structure, can help maintain that discipline.
Because in many cases, the moments that feel hardest to invest are the ones that matter most over the long term.
The post This simple ASX ETF strategy matters more than ever in today's uncertain market appeared first on The Motley Fool Australia.
Motley Fool contributor Leigh Gant has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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