What is investment ‘success’ and is there a secret to achieving it?

This summer’s Olympics were an inspiration. After three weeks of epic sporting action, I was itching to get back in my running shoes.

I’m not alone. In fact, according to a YouGov poll, one in four Britons reckon, if they start training now, they’d qualify for Los Angeles in four years’ time. That’s a lofty goal (especially the ambitious 6% who said they’d could run the 100 metres) for most of us though, it’s a touch unrealistic.

But that’s not really the point. You don’t need to be a professional athlete to take up a sport. The enjoyment and sense of achievement comes from setting your own bar and trying to reach it.

Likewise, the point of investing for most of us isn’t to become the next Warren Buffett. ‘Success’ is using your investments to reach your own personal goals. ‘Risk’ is not the temporary market declines, but rather the chance of not achieving your life plans.

So let’s look at a few of the simple things you can do to help you get there.

Shut out distractions

One thing most Olympians have in common is focus. They’re totally immersed in their event. They make sure they can’t be distracted by what’s going on around them. Many of those competing, whether they’re going for a medal or just a personal best, will have switched off social media. Some stay at their base training camp and miss the Opening Ceremony, or even move out of the Olympic Village, so they can concentrate on their own performance and nothing else.

Focus is important for your investments too. You have to cut out the noise – the tip from a taxi driver, the finance pundit in the newspaper, or the second cousin who’s ‘in the know.’ Let it pass you by.

That means not getting too hung up on volatility

One of the main things that causes people to lose focus is ups and downs in the market.

This summer, share prices in Europe, Asia and the US all took a big hit. Hopefully you didn’t notice; the Finance pages were full of doom and gloom, but they are not on your side. Paid for clicks they want to generate fear. Investors have been worried about several factors, apparently, not least the potential of a US recession and that technology companies are not doing as well as had been expected.

But it’s important not to get too bogged down in the scary headlines and day-to-day market movements. Japan, for example, suffered its biggest drop in a single day since 2020 – but has since rebounded. This isn’t unusual by any means. As this chart shows, at some point every year markets will have fallen about 15%. Over the course of 12 months though, the drops are usually reversed. The one-week falls of early August have already recovered.

Follow a process

It’s all very well talking about shutting out distractions, but that can be easier said than done.

There are so many areas where you have zero influence: market volatility, election results, interest rates, government policy. The trick is instead to focus on the areas you can control – it’s this that can give you more confidence in your long-term plans.

Take another example from the world of sport. David Beckham famously stayed late after training taking endless free kicks, making him one of the football’s most reliable dead-ball specialists. Repeating something over and over means you can be confident in performing, even if something surprising happens on the day.

We talk about market falls now, so you know what to do when they happen: nothing.

Having a process is essential in your investment life too.

At the very top, this process includes setting your goals and investment timeline, what you want to achieve and how long you’ve got to do it. This ultimately dictates what you need to do to get there.

Then we look at areas such as the levels of risk you can afford or need to take.

And finally, your asset allocation – are your investments targeted in the right areas, are they balanced between the stock market, bonds, and cash, giving you a good blend of risk for the conditions?

We check in on all these elements regularly, tweaking if necessarily, to ensure your plan is still doing what you need it to and you’re keeping on track.

Just like the athlete who prepares rigorously for various scenarios, having a clear, adaptable strategy in your financial planning helps ensure that when the unexpected happens, you're not thrown off course. This approach gives you the confidence to stay focused on your long-term objectives, knowing that while you can't predict every twist and turn, you’re still on track to hit your goals.

And it works - when markets started to wobble earlier this year, I prepared for a lot of discussions with my clients, preparing to reassure you over your long-term financial health. In the end this wasn’t really necessary. Not one of you phoned me up in a panic. I’d like to think that a large part of that is because we’ve frequently discussed the importance of shutting out temporary distractions before. You know the process and trust your investment strategy over the long term. So when volatility hits, you’re confident things are in hand.

It certainly makes life a lot less stressful.

Enjoy yourself

One final thought: enjoy things when they come.

It can be hard when we’re always thinking about the future to take a step back and savour the moment. These moments can be fleeting. Personally, I’m kicking myself for not having gone to Paris to watch any of the Olympics live – especially as such a short trip (certainly compared with LA in 2028).

The lessons I’ve discussed above can help us achieve that. Trusting that process means you’re able to look up from the steering wheel occasionally and this is much more significant for investors than it sounds. Failing to do it means we won’t know what we really want from life, and we’ll never get to enjoy the fruits of our labours.

Perhaps that’s what makes a successful investor: being truly aware of what makes you happy, making this type of ‘mindfulness’ a habit so that what you do with your money isn’t just something you think is good, but something you can feel is good too.