Going for gold!

Over 16 days, people around the world have been glued to their televisions, radios, computers, and a variety of media sources following the Olympics in Paris. 

Years of training and preparation are on display, and a good or bad decision on the spur of the moment could be the difference between gold and going home with nothing. 

It’s a time, once every four years, when this display of the very best in sporting endeavour is a focus everywhere from the classroom to the boardroom, as people from all walks of life seek to share in the Olympic ideals. 

It serves as a useful metaphor for almost any activity where dedication, perseverance, and application are needed to achieve one’s goals. 

So … here is what we can learn about investing from the Olympics? 

Preparation

Top level athletes don’t succeed through luck alone. 

Years of hard work, training, and studying the competition are needed to be at the top of your game. 

So it is for investing.  It’s possible to make a lucky call and a short-term profit, but most successful investors learn the game, develop their skills, and understand how and when to act. 

If you want to build your wealth, you need to study the markets and the economy, assess risks, learn the techniques of leading investors, and experiment with new ideas and strategies. 

Innovation

The Olympic program is continually evolving, as new sports are introduced to reflect changing interests and demographics (breakdancing, anyone?).  

The markets are also evolving, as new financial products and opportunities arise regularly, sometimes taking investors by surprise. 

Be open to the opportunities, but be careful to do your homework – you don’t want to be doing a kangaroo hop when others are pulling off a one-handed chair flare... 

Endurance

Even sprinters need endurance.  A 9.79 second race is not a one-off – it requires gym work, long distance running, and careful staging of training so that the athlete is at their peak on race day. 

They need to make the right decisions at the right time in the build up to the main event, so that they can capitalise on their hard work and set themselves up for success. 

While some traders make quick, risky decisions, the majority of successful investors play a long game – they have a strategy, they have their long-term goals, and they work towards them. 

You need patience and resilience, especially during times market volatility or economic uncertainty, and those who can maintain composure and make decisions at the right moments are most likely to come out on top. 

Strategy and timing

Knowing when to act is most important. 

A marathon runner, for example, rarely leads from the front for the whole 42.195 km, but bides their time and keeps in touch with the lead group. 

Athletes in endurance sports map out a game plan and deploy strategies to ensure that they can conserve their energy and don’t move too soon. 

While investors may at times feel pressured to make hasty decisions, you are likely to perform your best when working to a plan and having a good idea of the ideal time to make your move. 

Adaptability

Nothing always goes according to plan. 

An athlete’s strategy for an event might need to change quickly based on new information, to take advantage of shifting circumstances. 

For an investor, regularly reviewing their portfolio and adjusting their strategy based on new information is central to long-term financial success.  

The key is the investor’s long-term goals – plans may have to be amended to ensure that your investment strategies take you where you want to go. 

The Mental Game

Focus.  That’s the name of the game. 

Whether it’s a pole vaulter visualising their next jump or an investor weighing up a strategic investment, it’s important to push intrusive thoughts out of the way while you focus on what you’re trying to achieve. 

Don’t look beyond the sale to future profits or potential losses, consider why this investment is right now and how it’s getting you closer to your goals. 

Understand your risk tolerance, keep your emotions in check, and have a clear investment plan to keep you on track, especially in times of market unpredictability. 

And, if everything looks like it’s working, don’t get in the way of your own success. 

Strength in numbers

Champion kayakers like Jessica and Noemie Fox might be out on the course by themselves, but they are backed by a team. 

Similarly, as an investor you might be making decisions about what’s best for you, but you don’t have to do it alone. 

Being part of a community of investors, such as the Australian Shareholders' Association (ASA), can provide immense benefits and valuable support.  

ASA member groups provide a platform for sharing insights, seeking support, learning from the mistakes of others, and rising to the challenges of investing.  

Don’t give up!

The old saying goes that winners never quit, and quitters never win. 

In investing, as with the Olympics, there are great rewards that come from hard work and dedication. 

You may not get a gold medal with a piece of the Eiffel Tower embedded in it, but you can achieve your goals and secure your financial future if you stay the course. 

Celebrate your achievements, however small, and know that your fellow investors in the ASA are cheering you on.