It’s About The Long Game in Investing Success
No doubt many of you are familiar with the fable of the tortoise and the hare. The hare takes off in the race and guns it. He is superior in speed to his friend, the tortoise. He is aware of his superiority in speed and decides to take a nap, thinking he has time.
As he sleeps, the tortoise eventually passes him and goes on to win the race. The hare wakes up, but it is too late. Slow and steady wins the race.
Why on earth would I bring up this story? Well, I think it teaches us two things:
You cannot win a marathon by sprinting in spurts.
You win a marathon by going at a good, steady pace.
I am no expert in running. In fact, if you were to look at me, you would immediately know that I am not a runner. But, I do know the difference between sprints and distance. There is a reason that ultra-marathon runners like Rich Roll do not compete with Usain Bolt. You would not see Michael Phelps go up against Sun Yang.
You do not train the same way for these different events. There is some overlap, but the end game is different and requires a different strategy to be successful.
The reality is that people try to treat their investments like sprints. They chase hot stocks, tips, or sectors of the market. They are hoping to get rich quickly and in the end may not achieve what they are trying to do.
In fact, I just heard a sad story from an estate attorney. Twenty years ago he met with a couple to help them with their estate plan. At the time, their retirement nest egg was $550k. Now, 20 years later, it is worth $500k.
What went wrong? The market has been very generous the last 20 years and surely there should have been some growth, not a loss!
I don’t know all of the specifics, but it was probably a combination of buying and selling many stocks / bonds / mutual funds over the years trying to chase a better return. Poor timing could have also resulted in locking in losses during the last three major financial crashes. There could also have been high fees and/or commission that came out of the account.
When asked why they stuck with their adviser all these years, they said they liked the guy and trusted him.
This is very sad to me: seeing a couple who is ready to retire and essentially did not make any money with their investments for the last 20 years!
So what is the solution?
It’s about the long game.
It’s about discovering your true purpose for money and your personal risk tolerance.
It’s about building your portfolio around your risk tolerance and then staying the course.
It’s about rebalancing your portfolio systematically instead of impulsively.
It’s about the long game.
If you need help with getting your investments on the steady course towards success, please reach out to me and let’s talk.
