Investing is a marathon, not a sprint.
Aesop’s parable of the tortoise and the hare is a timeless, yet somewhat ambiguous tale. It chronicles a race between the slow-and-steady tortoise and the overconfident-and-lazy hare. The tortoise paces himself appropriately, while the hare opts to enjoy a mid-race nap. When the hare awakens, he discovers that his competitor has already won the race.
Investing is a marathon, not a sprint.
I appreciate this wise lesson, but an alternative version of Aesop’s tale provides deeper wisdom.
In this iteration, the hare decides to provide the tortoise a head start. Throughout the race, the tortoise grows stronger and faster, a development which was unforeseen by the hare. Despite the hare’s eventual efforts to work harder and run at much faster speeds than the tortoise could ever imagine, the tortoise wins the race handily. In fact, the result is far from a photo finish.
As investors, many people are like the hare. They are always waiting and preparing for tomorrow. Others are like the tortoise. They invest slowly and boringly over time and maintain remarkable consistency.
When it comes to investing, the average investor would be wise to learn from both the slow-and-steady approach of the tortoise and the speed and intensity of the hare.
Investing is a marathon, not a sprint.
Following my first half marathon in 2010, I began training for my first full marathon in January 2011. The days are cold and nights even colder during Illinois winters, which made the beginning of my training extremely brutal, both physically and mentally. To make matters worse, I was still trying to master the fundamentals of distance running: proper form, hydration, nutrition, and the all-important techniques to avoid chafing.
However, I established a regimented schedule for both training and rest, learned to listen to the signs and signals of my body, and improved as a runner. Despite many mistakes and a few minor aches and pains, I pressed onward and completed my training.
Exploring the Parallels – Investing IS a Marathon!
Race day arrived much faster than I ever thought possible. Though I had prepared as well as I could have expected, as I stood at the start line with hundreds of other people, a thought played over and over in mind:
What did you just get yourself into?!
Getting Started is Hard
The race director fired his gun, and we were off and running. The first mile was absolutely awful. I dodged slower runners left and right, expounding a lot of wasted energy in the process, and experienced my first doubts. I’m so far from the finish line, I thought.
Many people have these same doubts when they begin investing. They know they are beginning a long journey which requires patience and diligence, yet it is not uncommon for many beginning investors to experience waves of discouragement and doubt. So they work harder, save more, do more research, and re-read investment prospectuses. At first, their efforts barely move the needle.
As I approached the first aid station near mile 4, I felt satisfied. My body had finally warmed up, my doubts had dissipated, and my confidence was restored.
Achieving a positive net worth is much like a marathon’s first aid station. It is a milestone worth celebrating. This checkpoint is not achieved without hard work and sacrifice, yet it is only the beginning of a long journey.
Setting the Pace, Focusing on Your Goals
I settled down even more after the first aid station and found a comfortable pace. At times, running felt effortless during this stretch. Around mile 10, I passed by family and friends who were out to support me. They cheered me on and said I looked “very fresh.”
As I approached the midway point of the race, I noticed that many other runners were picking up their pace. I joined them for a moment, but wisely pulled back after a few minutes, as the pace felt unsustainable.
Moments later, I witnessed the jubilation of those same runners as they crossed the half marathon finish line. Unbeknownst to me, they had selected a different goal and adjusted their pace accordingly. As they crossed their finish line and celebrated the fruits of their labor, I began to feel sorry for myself. I still had 13.1 miles to go.
It is tempting for an investor to lose sight of the plan and pace and adopt someone else’s approach. However, their pace and goals don’t matter! Your pace and goals are important. Investing is a marathon, so be sure to run the race at your pace and aim for your goals.
Stay Strong, Finish Well
During the long stretch from mile 13 to mile 20, I found myself running alone much of the time. I was fatigued, yet I felt OK. I had experienced my fair share of emotional ups and downs by this point, but I trusted myself. I trusted my training. I continued to take one step at a time.
At the same time, I felt oddly apathetic. I didn’t feel much like drinking or eating gels, so I skipped an aid station. Instinctively, I knew this was a bad idea, but I just didn’t care anymore. I stopped thinking about the successful things I had done to get to this point.
The average investor is similarly susceptible to ups and downs, doubts, and apathy. When you have made sizeable progress toward achieving your goals yet still remain far from your nest egg target figure, it can be tempting to stop caring. It can be easy to rely on feelings and allow them to guide your choices and actions. You must remain consistent and continue to take the steps which helped your investments grow to this point! Investing is a marathon!
My experience from miles 20-26 was in direct contrast to the earlier stretches of the marathon. Up until this point, I was on pace to finish the race in 3 hours and 30 minutes. Everything changed at mile 20. While others whom I had passed earlier seemed to grow stronger, I was battling crippling nausea. I shouldn’t have skipped that aid station, I ruminated.
While this stretch was a slow crawl toward the finish line, it was a victory lap for one elderly gentleman. As this man who was old enough to be my grandfather passed me, he shared some sagely advice:
Just keep going. Keep your eyes on the finish line. Don’t give up.
For many investors, we experience the true ramifications of our mistakes during the home stretch. We wish we had started saving early, experienced more years of the wonder that is compound interest, and maintained greater consistency over the years. Yet the finish line of retirement is visible on the horizon.
As I passed the 26th mile marker and rounded a bend in the road, I saw the finish line for the first time in nearly two hours. I forgot about my nausea and soreness and began sprinting. I’m quite certain I must have looked like a geriatric patient gallivanting down the road, but I felt as quick as Usain Bolt as I crossed the finish line and received my medal.
Like an idiot, I awoke early the morning after the race and crawled out of bed to go for a short run. As I lumbered along under the light of the morning sun, I reflected on my training and race mistakes. Naturally, I was grateful to have learned many lessons. I was also eager to do better next time.
Recommendations to Win the Investment Marathon
However, there is no next time for investors. We all have only a single life to live, so it is important to act with wisdom the first time if we are to achieve the retirement of our dreams. Win the investment marathon by following these four recommendations.
- Start early! If you foolishly begin later, as did the hare, and think you can catch up, you are mistaken. Compound interest functions at its finest over long periods of time. Remember, as Warren Buffet said, “You can’t produce a baby in one month by getting nine different women pregnant.”
- Follow a plan. Remember, if you fail to plan, you should plan to fail.
- Keep it SIMPLE.
- Invest based upon your goals and desires, not those of anyone else. Your keys to happiness are not the same as those of others.
If you are looking to begin your investment race toward retirement, a number of routes can help you get started.
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Do you believe that investing is a marathon? On a lighter note, have you ever ran a half marathon, marathon, or ultra-marathon? What other parallels do you see?