Investing Like an Ironman

Saint George, Utah is known for big sporting events. This week is the Ironman race, a marathon competition that can take 17 hours to complete. Participants in this grueling event will experience a wide range of emotions as they pass through periods of speed and exhilaration coupled with exhaustion and pain. To succeed in finishing the race athletes must maintain a long-term perspective and not allow their temporary successes or failures during the race to distract them.

It is natural for humans to overweight the importance of their present situation. As a parent of a large family, I have often seen this tendency. Children can switch between their highest highs to their lowest lows over the course of just a few minutes depending on what is going on around them. We try to help them understand that life will not be “Happily ever After” just because today they are at Disneyland. Nor is their entire world coming to an end if their Mickey Mouse balloon unexpectedly pops.

Adults also struggle with over emphasizing their present state. I saw an example while watching a current event on the news last night. Highly respected political leaders were literally crying over the event with one proclaiming, “This is the worst disaster in American history,” with others echoing that sentiment. Regardless of your personal political feelings, this was a clear example of adults losing perspective.

The tendency to place undue value on our current situation is seen when a person loses their job and mourns that they will never recover. It is also seen when a lottery winner foolishly thinks all their troubles are suddenly over. Neither is true. In each case we must remember that in the marathon of life, the current exhilarating downhill ride will soon be replaced with an uphill struggle, but both will pass.

The application of maintaining proper perspective for investors comes down to understanding that you will need money for your entire life. You build that wealth over the whole course of your life through hard work, discipline and patience during the ups and downs. What your investments do over the course of a day, month or even year rarely matters. What matters is your overall lifetime return. It is with that goal in mind that you must maintain your perspective. Countless lottery winners were lifetime financial failures, before and after their big win. Likewise, countless average Americanshave patiently amassed wealth that will last generations. Perspective reminds us that today’s market rally may be erased by tomorrow’s market crash, but neither matter in a marathon.

Few master the ability to look beyond todays’ fleeting joys and sorrows, but success requires that we do. We can all be Ironmen and Ironwomen in investing if we don’t get discouraged by the bad times, nor unduly excited by the good. Instead, we must continue moving forward in our own personal marathon keeping all things in their proper perspective as we strive towards the final goal. That is the key to winning your personal investing marathon.

Dan Wyson, CFP® is author of “The Gold Egg," and “21 Financial Myths” and owner of Wyson Financial/Wealth Management 375 E. Riverside Dr. St. George, UT 84790 - 435-986-9525 – Securities and Advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment advisor