Improving Investor Behavior: The strength of endurance

My coach Dan Sullivan likes to say, “Amateurs practice until they get it right; professionals practice until they can’t get it wrong.” From athletics to engineering, medicine to money management, consistent practice is the secret sauce of victory.

Professional athletes always have a coach and are insistent on training. Their regimens are scheduled, predictable, and repeatable. They rely on coaching and tend to be much calmer with a focus on endurance and winning. They differ from amateurs who tend to train by pushing their limits. An amateur’s mindset is to maximize their limits and grind it out until they break. They live and die by the phrase, “no pain, no gain.”

When researchers look at the training schedules of Olympic-level cross-country skiers (some of the most focused and insane athletes I have ever seen), they find something surprising. These athletes train, on average, some 860 hours per year (or about two and a half hours every day). Their routines can be broken into three segments: anaerobic or high intensity, aerobic or modest strenuous effort, and low intensity, akin to a walk in the park.

The time spent in each of these areas is what’s surprising. About 89% of their training time is spent in low intensity, 6% in moderate intensity, and approximately 5% in high intensity. Like professional runners, cyclists, rowers, and swimmers, most of their training time is spent on low-intensity practice. These professionals purposely avoid pushing themselves to their limits or beyond.

Professional athletes understand the best athletic machines are built for longevity over intensity. Rather than being temporarily tortured and potentially subjecting themselves to injury and mental burnout, consistency at lower intensity is more beneficial.

As long-term investors, we can learn a lot from this approach. Stretching for the highest returns often leads to mistakes (injuries), failures (broken bones), and burnout. Looking back over my career, I recall countless “professionals” who were top dogs, until they weren’t. Where are they today? Most often, even Google cannot find them.

Instead of pursuing the highest returns, pursue sustainable returns. A modest rate of return over a prolonged period far surpasses short-term blips. For many, the preretirement accumulation phase will last about 40 years, plus another 30-35 years in retirement. That’s 70-plus years for your money to work for you. Students of Warren Buffett understand this approach. More than 90% of his wealth has accumulated since his 65th birthday, almost 27 years ago.

Compounding is investment returns tied to the power of time. Consistency over time is endurance, longevity, and the key component that handles all the heavy lifting. Stellar investment returns for a few years may sound enviable but are often not as impactful as decent returns over a long timeframe. Consistency is again the secret sauce.

This consistency helps us work toward success not only in the long run but also when temporary moments of high intensity require us to perform. High-intensity exercise all the time is poor preparation for moments when it is needed most. This approach causes burnout and stress. Instead, prepare for those moments with volume and consistency. A single investment or portion of your portfolio should not be enough to make or break it. Remember, consistent, long-term, diversified investments can help you work toward long term goals while helping to reduce risk.

Over the past 10 years, many investors went to the gym and started benching everything they could handle. They kept pushing themselves to the limit and now suffer injuries that have set them back. As a result, they are feeling the burnout and the confusion that comes with a change in what had been working and no longer is.