What can the Beatles teach you about long-term investments?

More than half a century ago on 5 October 1962, the Beatles released their first ever single and changed the face of music history forever.

Throughout the following 60 years, John Lennon, Paul McCartney, George Harrison, and Richard Starkey (aka Ringo Starr) would become arguably the most well-known four musicians in the world.

They would go on to release 12 studio albums and achieve 20 number one singles, as their songs set a format for pop music that’s regularly still heard to this day.

So, find out what the success of this Liverpool band can teach you about the power of long-term investments.

You need to have a strategy

The first investment lesson you can learn from the Fab Four is the importance of having a strategy.

The Beatles’ immense success didn’t mysteriously appear from nowhere overnight. After years of honing their different instrumental skills, the group spent a hugely formative five years at a residency in Hamburg, Germany, where they were able to refine their show and become a tight-knit band.

Evidently, the band had a plan for success, mastering their skills until they were good enough to take over the world with their catchy melodies and carefully constructed songs.

Your approach to investing should be just the same. You need to have a strategy for what you want to achieve, giving it the same care and attention as the Beatles in their song writing.

Having an end goal can be a great help here. Knowing what you want to achieve in the future can provide a target for your investments, giving you focus in your decisions.

Crucially, it was shortly after this period that the Beatles famously dismissed drummer Pete Best to bring in Ringo Starr.

This shows the importance of updating a strategy when things don’t seem to be working out. Had the band stuck with Best, it’s possible they wouldn’t have achieved the remarkable success they did over the coming decades.

For you, this means having an investment strategy that you can easily adapt to suit new or unexpected parameters. While starting with a clear plan or goal can help, this doesn’t necessarily make it failsafe.

Sometimes, if things aren’t going to plan, taking decisive action to update your investment strategy can provide a new outlook that benefits the achievement of your goals.

Investments will rise and fall in value over time

Setbacks are natural, even for musical greats like the Beatles.

Indeed, one of the band’s first ever auditions for a record label went horribly wrong, with a poor selection of songs failing to showcase their enormous potential. Industry giants at the time, Decca Records, turned them down after 15 songs left them underwhelmed.

The band had looked to this audition with hopeful eyes and thought it would land them a record deal. However, it resulted in a huge setback for the Liverpudlians when no such offer was granted.

Despite this, the group didn’t give up there and continued to work at their craft, eventually signing with EMI subsidiary Parlophone after being rejected by EMI themselves.

Instances like these aren’t dissimilar to scenarios of long-term investing. There can be similar setbacks and pitfalls on the road towards investment success, and it’s important to remember that your investments can go up and down while on your way to your final goal.

One of the many keys to long-term investing is to not panic if your investments do fall in value – markets will rise and fall so, as long as your portfolio is diversified and your strategy well-balanced, you simply need to stick to the plan and stay calm.

Maintaining composure through times of uncertainty is crucial to long-term investment, just as the Beatles would ultimately learn.

Beware “Beatlemania” and following the crowd

As the Beatles rose to international stardom, the size and hysteria of their crowds similarly grew.

This phenomenon, dubbed “Beatlemania”, also contains a valuable investment lesson – that of not always following the crowd.

Beatlemania describes a fanatic hyper-obsession with the band. Such a craze led to a variety of strange occurrences that could only be the result of an unhealthy fixation on the Beatles.

One bizarre effect of Beatlemania was fans’ theories that Paul McCartney had died and been replaced with a lookalike.

While it was of course untrue, it was a very genuine concern to die-hard fans of the band. Meanwhile, for those outside of the mania, it was clear that this was just pure hysteria.

Similarly, in the world of investing, following the crowd can lead you into precarious situations. Investment fads and trends often disappear as quickly as they first arrive, which can leave those who are led in blindly shouldering significant losses.

Large crowds that invest in similar assets can be burdened by groupthink, where all members of a group seek a similar result and align with each other’s opinions, no matter how irrational or dysfunctional.

So, stick to your strategy and keep away from such fads. It’s easy to be swept away by such hysteria, but it may present a real danger to you and your money.

Work with us

If you’d like to work with investment experts to help you manage your money, please do get in touch with us at Rosebridge today.

Email enquiries@rosebridgeltd.com or call 01204 300010 to find how we could help you.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.