The biggest threat to your retirement isn't what you think
Most investors spend too much time chasing the next market winner and not enough time thinking about their destination. Homer's The Odyssey explains why.
Few stories capture the challenges of long-term investing quite like Homer's The Odyssey.
In Homer's tale, it takes Odysseus 10 years to make it back to his homeland after the Trojan War. Seven of those years are spent in the rather pleasant embrace of the immortal nymph Calypso.
Maybe we could compare those years to investing on the ASX, where time slips by, markets drift sideways, and you wonder whether you've achieved anything at all.
Everyone wants to talk about the next 10% move on the ASX. Nobody wants to talk about the next 30 years. Yet that's the journey most investors are actually taking. They're trying to get home to Ithaca.
Homer wrote about it nearly 3000 years ago. Not the sharemarket, obviously, but about the long road home, the distractions, the disasters, the lucky escapes and, above all, the importance of simply keeping going.
The Odyssey is investing? Ithaca is retirement?
Then it isn't about beating the market every year. It is about reaching financial independence. It is about arriving.
The Odyssey's investing cast
- Odysseus: The long-term investor
- Ithaca: Retirement or financial independence
- Poseidon: Market volatility
- The Sirens: Speculative investments
- The Lotus Eaters: Investor complacency
- The Cyclops: Overconfidence
- Athena: Financial advice and wisdom
- Penelope: Patience and compounding
After all, The Odyssey finishes when Odysseus gets home to his wife, Penelope, his son, his dog, and, finally, his own bed.
Why staying invested beats timing the market
Homer's story begins after the Battle of Troy has been won. Now comes the difficult bit, getting home.
In investment terms, starting is easy. Staying the course for decades is the real challenge.
Poseidon and the sea are the markets. Completely indifferent to your plans.
Markets don't care about your retirement. They don't even know you exist. They simply produce storms from time to time.
Then we reach the Land of the Lotus Eaters, where complacency takes hold.
It is easy to see a modern parallel.
Global markets sit close to record highs despite higher bond yields, sticky inflation, elevated oil prices and AI valuations that are beginning to stretch credibility. It is tempting to believe everything will simply work out.
Who can blame Odysseus for being distracted by the Lotus Eaters?
Never checking your super, leaving too much money sitting in cash, or assuming someone else will take care of your retirement. Comfort is seductive. Years disappear quickly.
Odysseus eventually realises that comfort without progress is simply another form of failure.
The behavioural mistakes that cost investors money
Then come the Sirens.
The Sirens today don't sing from rocky islands, they appear on social media promising "20% annual returns". Bitcoin. Meme stocks. The latest AI darling. Every generation has its Sirens, singing songs of riches.
Everyone hears them. Many investors are tempted.
Odysseus asks his crew to tie him to the mast. He still heard the songs.
Good investors need the same discipline. Asset allocation. Position sizing. Risk management. Systems that stop emotion taking over.
The trick isn't avoiding temptation. It's surviving it.
Then come the sea monster and the whirlpools, Scylla and Charybdis.
Sometimes investing presents no good choices. Do you buy the dip? Raise cash? Hold your nerve?
Sometimes every option carries risk. Sometimes we have to choose the least bad outcome.
Investing can be the same. Sometimes success is simply losing less than you otherwise would have.
Then we meet the Cyclops.
This is hubris. The belief that every investment decision is brilliant and every success is due entirely to your own genius.
Odysseus defeats the Cyclops through guile rather than strength, but even then there is a sting in the tail.
Markets have a habit of humbling the overconfident just when they think they have everything worked out. Every bull market creates a few Cyclopes.
Then there is Circe who turns men into swine.
We have all got those stocks that have turned from a great idea into a dog or a long-term hold.
Our own investing journeys are also buffeted by the winds of behaviour. Selling winners too early. Hanging on to losers in the hope they recover.
Behaviour destroys far more wealth than markets ever do.
Why patience is every investor's superpower
Then we have Penelope.
She is a wonderful metaphor for patience. She quietly waits, weaving her tapestry while the years pass. She isn't distracted by the suitors. She plays the long game. She trusts that eventually the journey will end.
Compounding is rather like Penelope. Quiet. Unexciting. Relentless.
Along the way, Odysseus is guided by Athena, the goddess of wisdom.
Every investor needs an Athena. Not someone who predicts markets, but someone who encourages sensible decisions and filters out the noise.
Good advisers don't eliminate storms. They simply help you sail through them.
At the end of the story comes the final test. Odysseus alone can string his great bow and fire an arrow cleanly through the axe heads.
Investing is much the same. Only you can complete the journey.
Experience matters. Pure strength isn't enough. It takes knowledge, discipline and perspective to reach your destination.
Lessons investors can take from The Odyssey
- Focus on the destination, not daily market moves
- Ignore distractions and speculation
- Expect setbacks and volatility
- Stick to your investment plan
- Let compounding do the heavy lifting
- Seek wise advice when needed
Reaching your own Ithaca
By the time Odysseus reaches Ithaca, he has endured shipwrecks, storms, monsters, mutinies and painfully slow progress.
Yet through it all, he never loses sight of where he is trying to go.
This, perhaps, is the biggest lesson for investors.
Retirement isn't won by finding the next tenbagger. It is achieved by surviving long enough to arrive.
The greatest risk to an investor is rarely the market. It's abandoning the voyage.
That's a lesson Homer understood long before there were stock exchanges.
Get stories like this in our newsletters.
