An iconic scene in The Odyssey is Odysseus’ encounter with the Sirens. Their singing was so beautiful that anyone who heard it lost all self-control. Captivated by the music, sailors would steer their ships toward the Sirens and crash into the rocks. Odysseus wanted to hear the song without suffering the same fate, so before reaching them, he ordered his crew to plug their ears with wax. He then had them tie him tightly to the ship’s mast and commanded them not to release him no matter what. As the ship passed, Odysseus heard the song and began to struggle. He shouted, begged, and ordered his crew to untie him, but they ignored him, only releasing him once they were safely past.

Odysseus survived because he accepted a difficult truth: his future self could not be trusted to act rationally.

Investors have their own Sirens. Warren Buffett once noted that emotions are one of the biggest enemies of the equity investor. During booms, greed tempts us to stay invested in unsafe positions. During crashes, fear tells us to sell everything. This becomes dangerous because investments that perform well over the long term frequently suffer poor short- to medium-term performance.

One such strategy is index investing. Stock market index funds have historically produced attractive long-term returns, but they also experience severe crashes and prolonged stagnation. For example, over past decades, the Philippine Stock Exchange index (PSEi) grew at an average rate of seven percent per annum (excluding dividends). However, as many investors know, the PSEi has moved mostly sideways since around 2012. Other indices have experienced similarly long periods of stagnation, such as the United States (US) S&P 500, which in 2013 hovered around the same price level it had reached in 2000.

Imagine investing for 10 years, opening your portfolio day after day, and seeing all your positions in the red. Most investors would answer the call of the Sirens and abandon their plans, selling everything as they succumb to fear and panic. This might seem like reasonable behavior at first glance, but historical data shows that those who stuck with index investing for multiple decades grew their portfolios at average rates above seven percent per annum—much faster than bonds and time deposits.

Many other long-term investment strategies feature similarly long stretches of poor performance. As investors, we know bad times are inevitable, and they will tempt us to abandon solid strategies. Like Odysseus, we must find ways to protect ourselves from the Sirens’ calls of fear and greed.

One effective way to stay tied to your strategy is to write down your investment plan in advance. Before buying any asset, do your research, outline why you are buying it, and list all the valid reasons you would sell. Set your criteria while you are calm, and commit to following them.

When market volatility hits and you feel uncertain, force yourself to review your investment plan before taking action. Did something fundamentally break your core thesis, or are your original reasons for buying still intact? Is this a rational exit or just fear? Do not allow yourself to sell without reviewing your original strategy first.

Sometimes selling is the correct decision. A company can lose key customers, take on too much debt, or suffer permanent operational damage. However, before letting go of a good long-term investment, review your plan to make sure you aren't acting out of short-term panic.

Odysseus survived because he understood that once he heard the Sirens’ song, reason would evaporate. Instead of trusting his emotions in the heat of the moment, he bound himself to a plan in advance, saving his ship from irrational decisions.

There will be times when markets fall, headlines grow frightening, and you feel compelled to abandon your strategy. That is precisely why you must make your critical choices in advance—so reason can prevail over the Siren’s call.