Lets Conquer this Peak !

Few days back, I happened to watch 14 Peaks: Nothing Is Impossible. Its a docufilm which follows Nepalese mountaineer Nirmal Purja and his Sherpa team as they attempt to climb all 14 'eight thousander peaks' within a record time of under 7 months. I was really captivated & inspired watching it. Suggest you watch it if you haven't already, it’s on Netflix.

Reminiscing about the documentary, I could relate to many parallels between mountaineering & investing.

K2 - one of the most dangerous peak

It’s Tough!

Mountaineer’s face many adversities like avalanche, storms, lack of oxygen, equipment failure, fatigue to name a few. While an investor may rarely face such catastrophic adversities, long term investing is not easy. Investment journey is long and spread over many years, even a few decades. If you stay through the journey, over time, you would certainly encounter changing economic and market conditions, which are as volatile and as unpredictable as the weather one could encounter in the mountains. Economic downturn, political turmoil, war, slowdown, banking system collapse, terrorist attack, pandemic can bring huge storms in the financial markets! And add all other twists and turns in life, long term investing is not easy!

Say a 20-30% correction in markets seems an opportunity to invest? Rationally Yes! But the context would make you feel differently. Markets are usually down for a reason. Your job or business is at risk due to slowdown. Or yours & families health is at risk due to pandemic. Or your security is at risk due to war or terrorist attack. Or you are pessimist about the future due to political turmoil, economic downturn or banking system collapse. In such circumstances, it's difficult to stay rational, capitalize on the opportunity and invest.

Persistence, Endurance & Focus

High Mountains are known for unpredictable and harsh weather conditions. Every mountaineer who has a goal to conquer the summit knows he would have to face the adversities. It's the persistence, endurance and single-minded focus on the goal that enables the mountaineers to take every step towards it and not give up on their dreams. Our reason for deciding to scale a mountain or for that matter investing may differ from others. Actually, any goal in life that is worth pursuing, including wealth creation, needs persistence, endurance & focus.

When you approach a massive mountain, you are in awe. If you decide to scale the peak, only way is to carefully place one foot in front of other, for hours at stretch. Often the first step is the hardest. Just imagine that it is freezing cold outside, its dark, and oxygen concentration in the air is low. How easy do you think it would be to take that first step? Breaking bigger goal into more manageable, incremental goals makes it easier to commit to the first step. Success requires small progress for a sustained period of time (Endurance).

Mutual funds SIPs also, like mountain climbing, go through various market (weather) conditions. Over the long run, they average the peaks & troughs of the market and bring you closer to summit of wealth. Just like a true mountaineer, a focused investor needs to keep climbing, one step (SIP) at a time, without being overwhelmed by volatile conditions or the prospect of a huge climb to the financial peak.

Role of Sherpa

The role of Sherpas on mountaineering expeditions cannot be undermined. Being experienced, highly skilled and well versed with the local terrain and climate, they prepare the routes that mountaineers follow. Similarly for an investor, the role of a trusted, knowledgeable and experienced guide is of paramount importance. They would chart the financial journey for the investor to follow.

There are often many routes to reach the peak. There could be risky faster route or an appropriate safer route. Edmund Hillary once said, “the complete climb of a mountain is reaching the summit and getting safely to the bottom again.” Its role of the guide (Sherpa) to not only plan the strategy to conquer the summit, but also complete it with minimal risks.

Nirmal Purja on one of the conquered peaks.

We are together in this journey of wealth creation. Let me guide you along to the summit & back! Your Financial Sherpa, Jayesh :)