Date
16 January 2017
The uphill ride for cyclists can be likened to a bear market for investors, where preserving one's strength is the key. Photo: ascent.com
The uphill ride for cyclists can be likened to a bear market for investors, where preserving one's strength is the key. Photo: ascent.com

Investment lessons you can learn from cycling

Last Sunday, I participated in a cycling tournament in Hong Kong. This year, the route has been lengthened to 50 km from 30 km, passing through three bridges and three tunnels.

The race is fairly demanding in terms of physical strength and mental power. Participants were required to finish it within two hours, which meant they had to cover at least 25 km per hour.

Going up the slope is most testing for cyclists. Rather than going for speed, preserving the strength and energy is more important.

The uphill ride can be likened to going through a bear market. Rather than being too aggressive, investors should try to stay prudent and minimize the loss.

After finishing the uphill section, good cyclists would take maximum advantage of the downhill ride to pick up speed.

The same is true for investment. When a bear market is over and a bull market starts, investors can use more gearing to make the most of the strong trend.

Experienced cyclists know a route consists of multiple slopes, and that they are all different.

Likewise, bear markets take different forms, and investors can never be complacent.

In the Sunday race, the third major slope was actually the toughest, which reminded me of phase three of a bear market, when things typically look hopeless.

In cycling, as well as investing, psychological strength often holds the key. Qualities like perseverance and optimism are extremely important.

This article appeared in the Hong Kong Economic Journal on Sept. 30.

Translation by Julie Zhu

[Chinese version 中文版]

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RC

 

Founder and Managing Director of Pegasus Fund Managers Ltd.

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