If you’re one of the lucky few, you love it. But for many, it’s a necessary evil. We know we should be putting away a portion of what we earn – whether it’s to invest in property, shares, or save for a rainy day. We wade through articles filled with jargon and conflicting advertising messages in an effort to work out what’s best for us and our nest egg.
Running – or, more generally, looking after your physical (and often mental) health – is not dissimilar to looking after your personal finances. You typically love it or dislike it, but even if you dislike it, you’ve come to accept it as part of your routine.
Here are five lessons I’ve learnt from running that apply perfectly to investing:
Lesson one: It’s a marathon, not a sprint
Learning how to pace yourself – whether you are setting out for a five kilometre jog or an ultra-marathon – is a fundamental part of running. Estimating the pace you can sustain for the distance you are running means finishing races and achieving desired times. In ‘investing-speak’ this means having the right investment horizon, or investing with a long-term mindset by not risking too much of your capital on any one investment or trade. Go too hard too soon and you’ll have nothing left for the rest of the race.
Lesson two: There’s always going to be another race to run
It’s a common experience for people training for one race – and indeed anyone working hard to achieve their goals – for it to become the be-all-and-end-all. Have you ever felt so passionate about a stock or investment idea, so much so that you cut yourself off from other opportunities? It’s important to remember in these times that there’s always going to be another race to run, another investment opportunity – and getting caught up with one event only blinds you from the broader goal.
Lesson three: Keep a positive and focused mindset
Last year I found myself at the starting line of the Melbourne Marathon completely dreading what was to come. I’d signed up for the race six months earlier, and all but forgetting I had – because I’d hardly trained. I completed the race none-the-less and – in the most extreme way possible – found out the true meaning of the saying that marathons require more mental than physical strength. The same is true in investing and trading – your ability to stay focussed, positive and rational have the same importance (if not more) than skill itself. Anyone can run a marathon or become a successful investor – but you have to believe you can first.
Lesson four: Don’t try and do it all alone – invest in advice
You’ve probably heard the quote ‘it takes a village to raise a child,’ and I believe this applies to almost anything we choose to spend a lot of time on in our lives. It took me many injuries to realise I needed advice from a gamut of people – physios, podiatrists, running coaches, and, of course, a cheering squad – to reach my goals. You might think I’ve included this point to segue into plugging what we do at Rivkin, but the truth is that – whether you’re an experienced runner or investor, or just starting out – we all benefit from other people’s experiences and advice.
Lesson five: Diversifying reduces risk
Shin splints, pulled muscles, blisters and stress fractures – these are just some of the injuries many runners face. One way to avoid these all-too-common injuries is to ‘cross-train’: retain anaerobic benefits while minimising the impact on your legs – by swimming or cycling – for example. Don’t rely on your legs to last forever – build your ability in other areas so you can keep going when the going gets sore. It’s also important in investing to diversify your portfolio across asset classes, instruments and geographies – put your eggs in one basket, and you do so at your own peril.
What do you think? What real world lessons have you learnt, from running or otherwise, that you can apply to investing? Let me know in the comments below.
