What the London Marathon can teach us about investing

Last Sunday I attended my first London Marathon — as a spectator. It was at times chaotic, loud and a little overwhelming but the general atmosphere was fantastic. Over 56,000 runners took to the streets of London to run the historic 26.2 mile course, with last weekend’s race one of the hottest in the event’s history.

The annual event, which has raised more than a £1.3bn for charities since it was founded back in 1981, this year also broke the Guinness World Records for the most finishers at a marathon. 

Known for its fancy dress and increasing inclusivity, the marathon is not just about winning but achieving personal milestones. Having watched my best friend train for the marathon relentlessly over the past six months, it also illustrates what’s possible when people focus on their longer-term goals – and that brings me rather neatly to the benefits of being a long-term investor.

Buy and hold strategies

While every investor would love to see the stocks they’ve bought rocket in value overnight and secure them a handsome return on the way, unfortunately such scenarios are pretty rare.

So, a more favoured approach is picking stocks that are expected to be consistent, longer-term winners. This ‘buy and hold’ strategy means fund managers have such faith in their analysis that they’re happy to stay invested even during volatile periods.

It’s a bit like marathon training. Not every run feels great. Some days are tough, and progress can feel painfully slow. But staying consistent, trusting the plan, and putting in the miles eventually pays off on race day. Similarly, investing steadily over years – and sometimes decades – gives you the best chance of reaching your financial finish line.

One example of this strategy would be the City of London Investment Trust. Manager Job Curtis takes a conservative and cautious approach to the portfolio, focusing on cash-generative businesses and avoiding large, high-growth, or speculative stocks. This strategy tends to result in a portfolio that is less prone to frequent changes, leading to lower turnover.

The magic of compounding

One of the key reasons long-term investing works so well is compounding. In simple terms, compounding means you earn returns not just on your original investment, but also on the returns you’ve already made. Over time, this can create a snowball effect, where your money starts growing faster and faster – much like how small improvements in training add up to big gains by race day.

Albert Einstein is even said to have called compounding the “eighth wonder of the world” – and when you see the impact over 10, 20, or 30 years, it’s easy to understand why.

The IFSL Evenlode Income fund aims to leverage the power of compounding by investing in high-quality UK-based companies with market-leading positions, strong cash flow generation, and long-term growth potential. The managers believe the market fundamentally underestimates the value of high-quality businesses because of its obsession with short-term events. In 2017, the team launched the IFSL Evenlode Global Income fund while benefiting from a wider global remit.

Staying the course through the ups and downs

Of course, just like marathon day itself, investing over the long term isn’t always smooth. There are bumps in the road – market corrections, economic downturns, periods which benefit when it feels like you’re going backwards. But it’s important to remember that short-term volatility is normal.

The most successful long-term investors don’t panic when things get tough. They stay focused on the bigger picture, much like a runner pushing through a tough patch at mile 20 with the finish line in sight.

The Artemis UK Select fund springs to mind when it comes to staying the course. The fund’s high-conviction approach and flexibility in stock selection make it an attractive choice for investors who are comfortable with higher levels of risk in pursuit of substantial long-term gains. However, investors should be prepared for potential drawdowns during periods of market stress.

Read more: Buying the dip: India, US and the UK

Setting goals and sticking to them

One of the best things you can do as an investor is to set clear goals: what are you investing for, and when will you need the money? Having a clear sense of purpose – whether it’s saving for a house, retirement, or your children’s education – helps you stay disciplined and avoid getting distracted by short-term noise.

It’s a lot like a marathon runner pinning a goal time to their training plan. Without something to aim for, it’s easy to lose focus. But with a clear target, every step (or every monthly investment) becomes a building block towards success.

A few final thoughts

Watching the London Marathon was a reminder that incredible things happen when people commit to a long-term goal, trust the process, and keep going even when it gets hard. Investing is no different. You don’t need to sprint. You don’t need to be perfect. But if you stay the course, give your investments time to grow, and trust the power of compounding, you’ll be amazed at how far you can go.