People have varied opinions about investing. For most investing is some evil, for some it is just something that feels like a distant dream. And then there are some of us that understand the beauty of long term investing and can't get enough of it. I decided to represent investing in a easier to approach way. The following is a representation of how investing is like any relationship. Before I get to the topic of today, I'd like to apologies to my followers for not being around for a week. It has been quite busy and will continue to be for sometime, but hopefully I'll be able to drop by more.
Relationship model of investing
Initial interest and break ups
People tend to start investing when things are going great, the markets are at their all time high, or soon to be. That is a sign for many new comers, that now is the best time to hop in. This is a completely disastrous choice for most people who are new to investing. They start out investing, everything goes well. They make money like never before or at least they feel like they do. They get a crush, if you wish to call it that, they don't quite fall in love, but they feel very attracted to the market. They feel that this is going to be something great.
As during spring, people feel attracted more often, so in the markets, when the market is steadily rising new potential investors flock out in groups to rush out and find that perfect mate. They think they found it after trying multiple others that were promising, but didn't quite reach the potential. Then they find the awesome place to put all their money, it makes them happy. What could be better? They are about to fall in love!
As with many other relationships, something eventually goes wrong. There is a fight, the investor doesn't agree with what the market is doing. The market decides to show the investor that this ain't gonna cut it. It swings right down to the worst of its mood. The investor is left awestruck. Is this what it will always be like? I think this isn't for me. And right when the first troubles in the relationship have emerged, the investor and the market split ways. Leaving both at a loss.
Creating a lasting relationship with investing
By now, I suppose you know what I'm talking about. Well, here comes relationship advice 101 (not investing advice, not allowed to give that ;) ). Most relationships aren't perfect. I'd be willing to say none are. However, there might be some lucky or insane ones out there. But those are like a unicorn, you just don't see them and you don't even know if they exists.
Therefore, let's stick with a normal relationship. A normal relationship will have its ups and downs, just like the market. Those who stick with their partner through ups and downs generally create a long lasting relationship. They get to know the other during their good and bad times. They learn to appreciate the good times, but know that during bad times things aren't lost and things will be good again. As long as you stick together. With investing the same thing happens.
By actively maintaining your relationship and adding value to it through out good and bad times, your relationship will be a good and long lasting one. There are relationships that might last even if you completely disregard the other one in the relationship, but many will fail if you never attend to them. However, just by occasionally remembering the other one and making sure that they aren't going to run away, most relationships will be just fine. Some might even grow to become lifetime relationships. The more you attend, the more sure you can be that you know if things are going wrong and you can step in to fix them. You don't need to be there 24/7 and buy expensive things to keep the relationship healthy. Actually, the relationship might suffer from too much affection. At the end of the day you just need to be there with the other one.
Now remember at any point, you can imagine the partner or the other in this story as an investment. A well chosen one, will last you a long time, but there isn't any point in trying many, if you know you found the right one early on. Nor is there any reason to try everything, if you're not interested. You know what you want, but you won't find it by never searching.
What makes me love investing?
Investing is something that makes me happy in the long run. There are ups and downs, but I know that long lasting relationships are built on trust. I love the fact that understanding my choice of investment is enough and I never actually have to know everything. During multiple years investing will build up value and eventually it will multiply, like the amount of members in a family do in a long term relationship ;) Well, at least in many cases. Again, there are cases when they don't. The biggest difference between relationships and investing must be that if investing doesn't make your original count bigger, a human-to-human relationship is still worth it :)
Hope you enjoyed this unique take on investing.