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

Capital at Risk: The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

If you have to bet on the hare or the tortoise, we all know whom to pick. The tortoise is solid and reliable and it paces itself to the finishing line, rather than rushing there in frantic leaps and bounds. You could compare the tortoise to a portfolio of solid assets like blue-chip companies or Retail Savings Government Bonds. If you have faith and don’t expect to reap the rewards overnight, it could turn into a sound money maker in the long term.

Slow and steady is one of the golden rules of investing. By regularly drip-feeding small amounts into your portfolio you are more likely to benefit than if you invest a lump sum. It also means you don’t have to worry about second-guessing the market.

For all the technology and algorithms available 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 going well. Most people can’t predict market falls but you can do the sensible thing and not react. Markets tend to recover very quickly, so the safest course of action is to do nothing. Inexperienced investors panic sell. And they invariably don’t recoup their investment in the process.

When markets are down, professional investors start looking for undervalued assets because as the markets stabilise and then pick up, so will the value of stocks and bonds. Investors need to put their emotions aside and prepare for the long haul. Investing isn’t an experiment or a gamble driven by emotion; it should be a strategy you’ve mapped out over five to 10 years. This can potentially give you a great chance of seeing a return. Your investment is never guaranteed of course. If you think you will need money sooner, then you should always keep some savings for a rainy day.

It’s worth remembering that tortoises may not be very exciting pets, but they live for a long time. If more investors adopted their relaxed but meticulous approach, they would likely enjoy stable returns in the long term. That should free up some headspace to add excitement in other areas of their lives.