Investing can often feel like a high-stakes game.
We’ve all heard the stories about someone who got in early on a hot stock or nailed the perfect cryptocurrency trade. It’s easy to look at those stories and feel like success is just a matter of luck or being in the right place at the right time. But just like in sports, chasing investment returns without a solid strategy and discipline can lead to disappointment, sometimes even failure.
Imagine that you’re a marathon runner lining up to cover 26.2 miles as fast as possible. In the beginning, it’s tempting to sprint ahead when you see other competitors charging forward. But you could burn out too quickly and not have enough gas left to finish the race.
Learning the the hard way.
My first marathon was in Minneapolis, back in the early 2000’s. My only strategy was to carb load the night before, with a plate of pancakes at Perkins. Other than that, I figured I would pace off the front-runners. Why not? After all, they must have known what they were doing. So, if I wanted success, chasing them made sense. I quickly realized my mistake and almost had to be carried to the car after crossing the finish line.
The same basic principle applies to investing.
You might see some stocks or assets with dramatic short-term returns. The temptation to jump in and participate is overwhelming. Everyone else is doing it, right? But just because something looks like a sure bet in the moment doesn’t mean that it aligns with your long-term success. FOMO is real. However, just like in a marathon, committing yourself to a solid, pre-planned strategy will help ensure you successfully cross the finish line.
Fortunately, I learned my lesson after that first race and adapted my approach. Ultimately, this landed me at the Boston Marathon a decade later. If what other investors are doing is not part of your plan, then have the discipline to tune out the noise and stick to your strategy. Chasing short-term returns might feel rewarding in the moment, but it’s often a sprint that leaves you exhausted, with nothing to show for your effort.
A disciplined, long-term approach to investing may lead to greater returns.
Our team here at Foster Group is incredible at keeping clients focused on the plan and long-term goals. There is no chasing, but rather building and trusting the process. And most importantly, you won’t need to be carried to the car afterward.
Stay diversified!
