As April is the month of the London Marathon, you might be spotting more runners than usual as they prepare for the famous long-distance race that attracts competitors from across the globe. That said, it’s certainly not the only marathon on offer for runners who want to push their levels of endurance and personal fitness to the limit.
There are plenty of runners who travel the length and breadth of Britain to get their race fix, with some even travelling abroad for races such as America’s New York City marathon or Germany’s Berlin marathon (reputed to be the fastest in the world).
While for many of us the idea of a run that lasts for more than 26 miles is exhausting enough, there are those who prefer a bit more of a challenge and take part in “ultra marathons”. These races are typically a minimum of 30 miles long and can be more than 100 if you’re competing in some of the top races.
While long-distance running may seem as though it’s all about physical fitness, often it’s about having the right attitude, remaining focused and planning properly. As these are also attributes that successful investors tend to have, there are important lessons that long-distance running can teach us about investing. Let’s consider three of them.
1. Concentrate on your goal, not what others are doing
More often than not, those taking part in a long-distance race are doing it to achieve a personal goal. This could be to finish the race or to do it in a time that’s a “personal best”. Ask any seasoned runner and they’ll probably say that focusing on the goal and not worrying about what other runners are doing is often the best strategy when it comes to achieving a target.
Being too concerned about the pace of other runners might result in them speeding up, a decision they may later regret if they’re then too tired to complete the course. All too often it’s the same with investing, especially when the stock market is volatile and suffers a downturn, as it did in 2022.
Worrying about what other investors might be thinking or doing could result in you making a knee-jerk decision that costs you dearly and hinders your progress towards your goals. This is something we will look at next.
2. Have a plan for when the going gets tough
Experienced long-distance runners know that it’s often about pushing through the impulse to stop as fatigue sets in and fear of not reaching the finish line may start to take hold. To do this, you need to have a plan to deal with it when it happens.
Often, it’s about focusing on your goal so that you can push through the discomfort, which is typically what you need to do when investing becomes more of a challenge. This is especially true when the stock market suffers a downturn.
Knowing you have a plan in place, and that it’s taking to you to your goal despite the discomfort you’re experiencing, can help you remain calm, dig deep and keep going. Central to a good plan is the recognition that what’s happening was always going to happen at some point, and it’s just part of the process of achieving your objectives.
This means that you’re more likely to see a stock market downturn as a temporary dip. If you don’t have a plan, you’re more likely to make a knee-jerk reaction to sell to limit potential losses, which in reality could turn a paper loss into a real one.
To demonstrate this, consider the following illustration, which shows the performance of the FTSE 100 between March 1999 and March 2023. The index tracks the 100 top companies listed on the London Stock Exchange.
Source: London Stock Exchange
As you can see, overall, the index increased in value during the period despite significant downturns along the way. If you had sold your investments during these downturns, you would have locked in any losses you made and deprived your money of the chance to recover when the stock market later bounced back.
As you can see, like running, creating a plan to deal with challenging times means you’re more likely to go the distance and achieve your objectives when others around you quit. That said, always remember that past performance is no guarantee of future performance.
3. Work with someone who can help you achieve your goals
Any runner who’s serious about succeeding in long-distance races will work with professionals to ensure that they’re physically and mentally prepared and have a strategy that works. Not doing so is more likely to result in failure and injury.
From nutritionists to personal trainers and running coaches, experienced runners understand that working with professionals can help to boost performance. Furthermore, a nutritionist, personal trainer or coach will take the time to understand your specific goals, assess your current levels of fitness, and explain how realistic your objectives are and what you need to do to achieve them.
This is the same with investing, as a financial planner will work in exactly same way. They’ll take the time to understand your goals and why they’re important to you, assess your current wealth and then create a strategy to help you achieve them.
Furthermore, a financial planner can monitor your progress towards your aspirations and provide options to get you there if you’re currently not on track to meet them.
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As you can see, investing should always be seen as a long-term venture, which means you should always have a robust plan in place to help you achieve your objectives. Working with a financial planner who takes the time to understand you, your goals and your situation, and then provide a strategy that’s individual to you could significantly increase your chances of success.
If you would like to discuss how we create financial roadmaps that help our clients get the most from their wealth and investments, both in the good times and the bad, please email firstname.lastname@example.org, we’d be happy to help.
This blog is for general information only and does not constitute advice. It should not be seen as a substitute for financial advice as everyone’s situation will be different. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The information is aimed at retail clients only.
Investments carry risk. The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.