A key to a successful investment experience is understanding how markets behave and developing the discipline to avoid rash decisions based on short time periods.

The recent performance of the New Zealand and Australia share markets drives this home.

There was a distinctly gloomy tone to media commentary in late 2018. The New Zealand market rose by a little under 5 per cent over the year, it was still its weakest performance in seven years. While the Australian market had closed out its worst year since 2011, falling 3 per cent.

What did most of the damage was a rough final quarter. Developed markets fell around 11 per cent amid media headlines focusing on US-China trade tensions, continuing uncertainty over Brexit, slowing global economic growth and earnings warnings.

The picture in mid-March 2019 is in stark contrast. The New Zealand market had gained just under 6 per cent, while the Australian market was up by a little over 10 per cent in the first two months. The global equity market, as measured by the MSCI World index, was up by just under 10 per cent.

Interestingly, many of the headlines remain the same ... trade tensions (albeit with prospects of a deal), Brexit, slowing growth and earnings uncertainty. This is a reminder that market participants are continually absorbing information and calibrating their collective expectations.

As market prices are always forward looking, they continuously reflect these changes in information and expectations.

Highlighting how quickly markets can change is the fact that while the 6 per cent fall in Australia's benchmark S&P/ASX 300 index last October was its sixth worst monthly performance in 10 years, its 6 per cent gain in February was its eighth best in the same period.

The lesson is that while shares have historically generated higher returns than cash, their performance over shorter periods can differ considerably from long-term returns. For instance, the long-term return of Australian shares going all the way back to 1980 is about 11 per cent per annum.

Performances of various asset classes from month-to-month and year-to-year are also unpredictable. For New Zealand investors, for example, Kiwi shares were a relative winner in 2018. But in 2017 it was emerging markets, while in 2011 it was fixed interest.

For Australian investors, listed property was the best performer in 2018. The year before it was emerging markets. And back in 2011, it was fixed interest.

Of course, most gains and losses month-to-month are nowhere near as dramatic as in those instances. But the bumpy ride that shares sometimes provide over the short term is the price we pay for the chance to earn the returns on offer over the long term. Being informed about the volatility of market returns helps you embrace this uncertainty, ignore the constantly changing headlines and stay invested.

By the way, you can reduce the bumpiness of that ride by expanding your investment opportunity set and diversifying across different markets and asset classes.

What will be the best investment in 2019? No one knows. You can guess, but that's an approach to investment that really comes down to luck.

The alternative is working with a financial adviser who has your best interest at heart, building a mix of assets tailored to your goals and risk appetites, diversifying as broadly as possible and learning to take the rough with the smooth.

• This article is brought to you in partnership with Dimensional Fund Advisors. The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an authorised financial adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961.