Investing is a marathon not a sprint

Covid-19 is worrying, full stop.  Companies and livelihoods look precarious and there is a lot going on to try and lessen the impact. There is however, no getting away from the facts. The FTSE has posted it's largest quarterly fall in more than three decades and the end still looks a long way off.

People are naturally worried about the value of their pensions and investments. Many investors out there have only known the most recent (and longest) bull market in history. It started in March 2009 and it has just come to an abrupt and unpredictable end.

It is worrying, we get it, so we thought we would have a look at some wise words from a seasoned pro. Love him or hate him, Warren Buffet is arguably the greatest investor of all time. When he speaks, people listen. So what words of wisdom can he offer in these tough times?

Focus on what matters

"Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard."

The key takeaway:

Stock markets swing widely and react to the smallest events as well as the big ones. They can overreact to current events in ways that often seem dramatic. This affects fund values and pensions as well as the underlying stocks.

Try not to get caught up in the short-term craziness. There is no need to panic sell., stick to your investment plan and trust the research. History has taught us that markets often get it wrong and they do bounce back.

Prepare for the long game

“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a fly epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

The key takeaway:

Investing is a long term strategy. Looking at your position on a day to day basis might be interesting and, at the moment, slightly scary. Affording your lifestyle over the long term isn't a matter of short term movements.  It's about getting a plan in place and sticking to it.

Be patient

“Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.”

The key takeaway:

Patience is probably the biggest mindset shift. In a world where short-termism has become the new norm, it's worth taking a step back. Some things just can't be rushed, and saving and investing for a lifetime of happiness and security is one of those things.

After all, good things come to those that wait. This isn't about the short term swings, however bad they are, this is about the next 50 years.

Know yourself

"A low-cost fund is the most sensible equity investment for the great majority of investors."

The key takeaway:

We all think we are a little bit of 'Warren' deep down, but in reality the vast majority of us are (in his own words) 'know nothing' investors. We don't have armies of analysts at our disposal, nor are there enough hours in the day to do the research. When it comes to being a pro it really is a  particular type of person that does it and does it well.

For all these reasons even the master himself advises the use of funds. Luckily for you, at Multiply, that's just one of the many things that we advise you on. Not only does your plan look after your security, pension and protection it also looks after your investment fund recommendations. If you keep your info current, the advice will be too.

The final word

It's really tough out there for a whole host of reasons. Covid-19 will pass and we will come through it. Whilst we are in the thick of it, the tendency is to only focus on cash savings, but in reality investments in stock and shares have historically been a good bet. There is no reason to believe that won't happen again.

If you remember one thing from this period, it's the need to develop your marathon mentality. Remind yourself that you are in this for the long haul.

Using Multiply can really help you get on top of your finances. Financial resilience and protection have always been a key feature of what we do, but it will also bring you closer to realising your goals through smart investment advice.

Keep dreaming, keep planning and keep safe.