Why Investing Has Always Been A Marathon, Not A Sprint

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For those of us who run regularly, there are different motivations behind why we run. For some, it could be due to medical advice given to us to lower our weight and keep our bodies active. For others, it could be for aesthetic reasons, as we want to look good. Or for a few, it could be that we simply enjoy the runs as it gives us the time to relax our minds.

Similarly, we all start our investing journey for different reasons. For some, it could be the goal of early retirement. For others, it could be the desire to build a secondary revenue stream so that we are no longer reliant on our employment income. And for a handful, it could be that we simply enjoy understanding the markets and being able to make profits from our investments.

Regardless of our reasons for wanting to invest, we should always think of our investment journey as a long-term marathon and not a short-term sprint.

Avoid Starting Too Fast In A Race

It’s always thrilling to be ahead of others. Yet, as the story of the Tortoise and The Hare by Aesop taught us, it’s not that important to be starting fast. Rather, what is more important is how we finish the race. This principle applies to our investment journey as well.

When we start our investment journey, it’s okay to go slow. In fact, we would even say it makes sense to start slowly. This is because when we are new and less experienced, we tend to make more mistakes. Instead of investing a large sum of money at the start (i.e., starting fast), it would be more strategic to invest a smaller sum of money initially and start building our investment knowledge before committing more.

Starting slow allows us to gain valuable experience and understanding of the market dynamics. It provides an opportunity to learn from any initial mistakes without risking significant capital. By gradually increasing our investment as our knowledge grows, we can make more informed decisions and potentially avoid costly errors.

In essence, the emphasis should not be on how quickly we enter the investment arena but on the consistency and wisdom with which we navigate the journey. Taking the time to build a solid foundation in investment knowledge can contribute to a more successful and sustainable long-term investment strategy.

Learn To Run At Our Own Pace

The most important aspect of running a marathon well is learning how to run at our own comfortable pace. If we run too quickly, we run the risk of overexerting ourselves, which may lead to early-race fatigue that would undermine our performance. It may even cause us to quit the race prematurely.

Similarly, in our investment journey, it’s crucial to avoid getting worried about what the people around us are doing. Instead, we should focus on how we want to invest wisely for ourselves. This involves understanding various investment approaches, learning important concepts such as diversification and asset allocation, and implementing them in our investments.

Much like a runner who paces himself well, a successful investor also needs to be disciplined in how they invest. Being an emotional investor is rarely an advantage. It’s important to avoid getting greedy, like everyone else, when the markets are performing well, or to be overly fearful when markets are underperforming. Remember, the goal is to be a successful investor in the long term, not just in the short run.

Discipline in investing involves sticking to a well-thought-out investment strategy even when faced with market fluctuations. This could mean rebalancing a portfolio, staying committed to a long-term plan, and avoiding impulsive decisions based on short-term market trends or based on what our friends or social media say we should invest in. By maintaining a disciplined approach, investors increase their chances of achieving their financial goals over the long term.

Challenges Are Part Of The Investment Journey

Just because we choose to run at our own pace doesn’t mean that the race is going to be a simple, smooth-sailing one. As any runner would tell you, there would be difficult periods during the race where we may experience challenges including cramps, tiredness and mental fatigue.

Instead of feeling discouraged because of these challenges, we should recognise that such fatigue is a normal part of a marathon, and even though we may be tired, it’s still possible to push through. This resilience is, in fact, a crucial aspect of achieving success in the long-run.

Our investment journey will offer us a similar experience. As experienced investors already know, financial markets are far from smooth-sailing. It would be sensible to acknowledge that we are going to experience both the ups and downs of the market and formulate an investment strategy that can build up our portfolios across both good and bad times.

For example, in the past four years alone, we have experienced the COVID-19 pandemic, high inflation and interest rates, wars on multiple fronts, and geopolitical tensions across the world. However, if you had decided not to invest due to all these uncertainties, you would have missed out on a 42% growth based on the S&P 500, growing from 3,234 on January 3, 2020, to 4,604 on December 8, 2023, which is an average of about 10% per year.

The analogy that I want to draw here is that just as a runner faces challenges during a marathon but can still reach the finish line with perseverance, investors can navigate through market uncertainties and fluctuations by staying committed to a well-thought-out investment strategy.

Get Rehydrated & Recharged Regularly

A marathon is a long race, and while we can do all we possibly can to prepare before the race—such as carb loading, ensuring a good night’s rest, and staying well-hydrated—that is still not enough to carry us through the entire race. This is why there are regular water points during the marathon where runners can rehydrate themselves with isotonic drinks and water. Additionally, they can consume energy gels and bananas to refuel themselves, replenishing the energy they expend during the run.

Similarly, in our investment journey, it’s essential to recognise the need for regular recharging. Just as marathon runners strategically replenish their energy reserves at designated points, investors should proactively engage in activities that recharge their financial knowledge, and enhance their financial acumen.

One crucial aspect is consistently learning to improve our investment knowledge. Staying informed about market trends, financial instruments, and evolving investment strategies is akin to the runner’s pit stop for hydration. This ongoing learning process equips investors with the insights and skills needed to navigate the ever-changing landscape of the financial markets.

Fueling Up For The Next Lap

“Fuel Up For The Next Lap” will be the theme of the FSM Invest Expo 2024. An annual event organised by FSMOne, the FSM Invest Expo is a free-to-attend one-day event that serves as an ideal checkpoint for investors to fuel up for their next lap.

Held on 6 January 2024 at the Suntec Convention Centre, the FSM Invest Expo 2024 will have industry experts including financial analysts, portfolio managers, market strategists and financial journalists who will share their views, experiences and research to guide investors in their ongoing journey.

As a speaker representing DollarsAndSense, I will share my insights on “what you need to know about investing in your 20s”. This talk will be beneficial for anyone starting out on their investment journey. Additionally, I will participate in a panel discussion that will be discussing “how not to be dumb with your money” as we uncover the typical pitfalls and errors that investors often face.

Apart from the talks, there will also be booths and activities where we can interact with major asset managers and fund houses such as Capital Group, Nikko AM, JP Morgan, BlackRock and many more to learn more about investing. There will also be exclusive event-only deals for attendees, including lucky draws and sure-win prizes of over $20,000 worth to be won, so this would be useful for anyone looking to recharge before they embark on the next lap of their investment journey.

Sign up for the FSM Invest Expo 2024 here. Registration is free.

Read Also: Investing During A Bear Market: Could A Dollar Cost Averaging (DCA) Approach Make More Sense?

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