It’s a marathon not a sprint:
the long game of investment

Capital at Risk: All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

If you have to bet on the hare or the tortoise in a race, we all know who to pick. The tortoise is solid, reliable and paces itself steadily to the finishing line rather than rushing there in frantic leaps and bounds. Maybe we could compare it to a portfolio of solid assets such as blue-chip, large-cap companies or UK government bonds. Have faith – and don’t expect it to turn overnight into a money maker.

In financial terms, going slow and steady is the golden rule. By drip-feeding smaller amounts consistently into your portfolio – into your ISA every month, for example – you are more likely to benefit than if you invested a lump sum. It also means you can avoid trying to time or guess the market.

People often forget that, for all the technology and algorithms we use today, capital markets are still dominated by human investors, who are prone to panic, fear and greed – as well as getting carried away when things are good. If the market dips, you probably won’t see it coming and you likely won’t know how you will feel on the day. But you can predict exactly how you should react: do nothing.

Yes, do nothing. Panic selling is what inexperienced investors do. By getting back less money than they invested in the first place, none of them wins. In fact, when markets are down the most professional investors start looking around for undervalued assets, expecting that as markets stabilise over time, so will those stocks and bonds.

So put your emotions aside. This really is about the long haul – equivalent to a lengthy documentary series where not much happens but you have learnt a lot of basic life lessons by the end. Investing isn’t designed to be an experiment, a gamble or an emotional rollercoaster. The ideal minimum period to invest is five to 10 years: that gives you more chance that your money will make a return. It’s worth noting, though, that your investment is never guaranteed. If you reckon you will need money sooner than that, keep some cash savings for a rainy day.

Back to that animal race. Tortoises don’t really make exciting pets. But they live a long time – maybe because they don’t sweat the small stuff. Perhaps if more investors adopted their relaxed, calm approach, we would live longer and get more predictable and stable returns on our money. We would then have the headspace to make the rest of our lives much more exciting.

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