Shut Up, Brain: Why Investing Is a Marathon, Not a Sprint
Like marathon running, successful investing takes discipline, patience, and a solid plan. Learn why staying the course, and tuning out fear, can lead to long-term success.
“Shut Up, Brain!”
This is what appeared on one of the signs that Nike Inc. (NKE) posted along this year’s Chicago Marathon course. It is good advice for both runners and investors.
Though running and long-term investing are very different activities, the keys to succeeding at both share similar traits: a good plan, discipline, patience, a willingness to accept uncertainty and knowing thyself.
A Good Plan
Training for a marathon requires gradually building up mileage over several months. The key is to increase your endurance in a way that does not result in getting hurt. My marathon training schedule spans 17 weeks, with my workout schedule planned out for the entire period. (I ran Milwaukee’s Lakefront Marathon at the start of this month.)
Investing for long-term goals also involves a gradual buildup. Regularly contributing to savings, increasing the size of those contributions over time and following an evidence-based investing strategy are key. You should be clear about your allocation strategy, including what adjustments you might need to make on a periodic basis. Failing to follow the plan can seriously injure your portfolio.
Discipline
Running a marathon requires lacing up your shoes and doing the workouts listed on your training schedule. There are no shortcuts.
Long-term investing is no different: Being a consistent saver, putting the money to work without hesitation and staying in the market are key.
There will always be temptations to pull away from your plan. I turned down social activities so I could make the 6:45 a.m. Saturday training runs. I also have my retirement contributions taken directly from my paycheck to ensure my future self has enough wealth.
Patience
This is closely related to discipline. Building endurance takes time. So does building wealth. There is no way to achieve either quickly without risking significant harm.
Investors would be wise to think in terms of time in the market instead of timing the market. The longer you can let your portfolio work uninterrupted, the greater your long-term wealth will be.
A Willingness to Accept Uncertainty
As runners, we don’t get to choose the weather we will have on race day. We can only adjust our strategy based on the conditions, whether it’s rain, wind or heat. The prospect of injury or illness is always present, even with our best efforts to avoid both.
Investors don’t get to choose the conditions that will exist over their time horizon. Corrections will occur at inopportune times. Bear markets will interrupt portfolio growth. Life events will challenge the ability to save.
It’s impossible to forecast the timing of any of this. The best we can do is to focus on controlling what we can control. There is tremendous power in being able to keep your cool when the world tries to rev up your emotions.
Knowing Thyself
When I showed up at the starting line in Milwaukee, everyone was cautioned by the race announcer to slow their pace because of the unseasonably warm temperatures. Since I knew how my body would react, I had my watch already set to slow my pace as the race went on. That adjustment allowed me to finish.
Some investors never blink when downside volatility occurs. Others get very nervous. Whatever your investing tendencies are, adjust for them. This could mean scheduling times to look at your portfolio, setting rules to rebalance whenever the market rises or falls by a certain amount or even creating a strategy for dealing with bear markets (e.g., allowing yourself to shift a small percentage out of stocks when you get very nervous). Similarly, retirees can have a certain amount of cash set aside to provide a cushion against down markets.
Follow evidenced-based strategies, adapt them to fit you and stay focused on your goal—whatever your finish time may be.
And Remember
Sometimes you just need to tell your brain to shut up!