With this article, we continue our series dedicated to drawing analogies between investing and sports. In previous posts we first talked about swimming and then about cycling.

In this one, we delve into one of the most demanding tests for our body: the marathon.

The marathon is the great metaphor for sustained effort. It is not won by the strongest, nor the fastest, but by those who know how to endure, maintain their pace and not give up when everything hurts.

Long-term investing is very similar. You have to learn how to dose effort, overcome crises and keep your mind focused on the goal, not on every kilometer.

1. The loneliness of the runner = financial psychology

Even if there are thousands of runners, each one runs their own battle. The mind becomes your main ally or enemy.

In investing, the same thing happens. For years, you will feel like you are running alone. Your strategy will not always be the flashiest or the most popular. That’s why you need self-confidence, calm and discipline. In general, we have weak financial psychology. Just as for a marathon we must prepare ourselves to overcome efforts we are not used to, to succeed in investing we must understand that market volatility is normal, and that every 2.5 years there are bear markets.

2. The wall = market crises

Especially in a marathon, we must prepare for what is called “the wall”. At km 30-35, many runners hit the dreaded “wall”: the body rebels, the mind weakens. The runner wonders if it makes sense to keep suffering.

It is at this point where the outcome is defined.

In investing, walls are stock market crashes, uncertainty, or fear of losing what has been accumulated. At that point, the investor may question whether it makes sense to take risks.

You don’t always have to come first. Sometimes it’s enough just to stay in the race to reach the goal. To finish a marathon, you have to know how to overcome the dreaded “wall”. To invest successfully, we must learn to overcome the inevitable financial or stock market crises.

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3. The right pace = your risk profile

Starting too fast in a marathon is a guarantee of collapse. On the other hand, going too slowly takes you away from the goal and may even prevent you from finishing the race.

In investing, this is your risk profile: if you invest with more risk than you can tolerate, you will quit at the first downturn. If you take on too little, you won’t reach your goals. Getting the pace right in a marathon is almost a science. There are methods to try to get it right. In investing, profiling helps define it.

In investing, dividing our wealth into different goals (short, medium, long term) is usually very useful. In a marathon, one technique used is to start “negative”: run the first half of the marathon a little slower than what we think is our ideal pace, to ensure finishing and being able to end positively with a faster pace.

The time we spend investing helps us know ourselves better and know how we react to market situations and refine our risk profile.
For marathons, training and participating in half marathons or in several marathons will help us choose our pace better each time.

4. Participation is what matters. The goal is to finish, not necessarily to win

Marathons are becoming more and more popular. Thousands of amateurs participate in the hundreds held around the world every year.
Investing is increasingly within reach of any pocket.

If an amateur trains enough and is persistent in their effort, they can finish a marathon. If they decide the right running pace (their risk profile) they have many chances to finish.

For an amateur, what matters is finishing. For an individual investor what matters is not to obtain the highest return, but to risk only what is necessary to achieve the goal, just as in a marathon it is reaching the finish line. Thousands of amateurs finish their marathons every year.

Millions of people can invest efficiently and successfully with services like inbestMe or by understanding its investment philosophy based on indexing and low costs. Simply by avoiding mistakes, there are many chances of success.

Conclusion: your investment is your race

Every marathon is a test against yourself. Like investing, it requires knowing your body (profile), managing energy (strategy), overcoming the wall (crises) and not falling because of an avoidable mistake.

At inbestMe we help you to:

• Choose well your pace and profile (or profiles if you have several goals)
• Design your race plan
• Overcome walls intelligently
• Participate/Invest by avoiding the mistakes of trying to chase the best return

Because investing, like running a marathon, is not about speed. It’s about not stopping until you reach the goal.