Love is Like the Stock Market

Love and the success of our relationships is just like the stock market. There are risks. There are rewards. And, without risk, there can be no reward. There is the potential for catastrophe if mismanaged. There is the potential for wealth, prosperity and security. The outcome is based mostly on what we know and how we apply that knowledge. There are always external factors that cause some uncertainty, doubt and risk, but, again, how the investment is managed on a regular basis mitigates much of this.

Investment. That is the key. Neither lasting love nor a rewarding portfolio will ever be possible unless we invest. And, like stocks, love never comes with guarantees. With wisdom, discernment and due care, though, investment in stocks and investment in a loving relationship is likely to perform well, over the long-term, providing us with all we hope to attain; wealth, prosperity and security. The longer we stay invested, the better the return, too!

We must take risks in love and in money to experience success. We either invest in a carefully selected portfolio, each stock selected based on the integrity of the company and the likelihood of growth, or we keep our money in a savings account at the bank, earning next to nothing in interest. Love is the same. We choose our love interest based on their integrity and the likelihood for growth, or we hide our love away in a low interest bearing account and wring our hands at our lack of fortune. We can either take the leap of faith and invest our hard earned dollars in the market, or stuff our money in our mattress for a lifetime and die alone and not very rich.

I don’t often quote anything from the Bible, but a parable comes to mind, from my childhood Sunday school days; the parable of the bags of gold (talents), from Matthew 25:14-30. In this lesson, a king, in preparation for a journey, entrusted three of his servants with his wealth divided into bags of gold, each a different amount based on the skills and abilities of the servant. In his absence, two of the servants invested their share of the king’s wealth wisely, worked hard and doubled the sum. For this they were rewarded, upon the king’s return, with additional wealth. The third servant buried the gold in the dirt, and the king punished him by taking his share of the gold and distributing it to the other two servants. In investing money, or investing in love, the same lesson applies; if we invest well and work hard, we will be rewarded with growth and wealth. If we bury our money or love “in the dirt”, not only will it not grow, we will likely lose that which we had to invest in as well.

I follow a popular author regarding investing and growing wealth by the name of Phil Town. I have seen him speak and I have read his books, admiring his straightforward and practical philosophy. In his book, “Rule #1”, he outlines his sensible approach to investing; never invest in a company, as in buy stock, if you wouldn’t want to own and run the company yourself. In other words, do you believe in what the company does? How they conduct their business; treat their employees, the environment, their political positions, etc. Phil suggests carefully researching the company you wish to invest in, if you would be happy to own the company based on their management, philosophy, how they conduct business and they are a sound investment, invest. If not, don’t.

Phil’s methodology applies to people we seek to have relationships with. If we are comfortable with how they manage themselves (integrity, honesty, fidelity), their philosophy is in alignment with ours or compliments ours, and they conduct their business well, they don’t take advantage of people, they are respectful, grateful, kind, loving, have a good work ethic, then they are probably worth the risk, worth investing in. If not, then don’t.

The initial investment is the first, big step, of course, but its what happens after the initial investment that will make or break the bank, again, in love and in money. Sure, once we invest, there may be moments of uncertainty and volatility, which is normal, in the market and in love. There may be lulls in the market, too, where nothing seems to move in any direction. We need to be aware of this, never should we ignore it, nor should we microscopically manage our “portfolio”. We should always keep in mind the points we considered when we made our initial investment and then monitor the trends for long-term growth. We once valued the basis for our decision, considered the points valid and of merit, are they still valid? If so, then hang on tight and ride out the uncertainty of the market. If not, consider adjusting your portfolio or liquidating the investment. Over the long term, even if there are momentary dips, the value of a carefully selected and scrupulously maintained portfolio will increase, providing that which we look for, growth, wealth and security.

How many little old ladies have you heard of who bought two shares of some solid blue chip stock sixty years ago that have amassed a small fortune from the meager investment? Who got in on Apple, Microsoft and Intel early and rode it out? Any complaints? Any regrets? I think not.

Is love somehow different? No, not really. The same basic principles apply. Invest. Assume some risk. Nurture. Reap growth, wealth and security for the long-term.

How is your portfolio performing? Are you invested for the long term?
How is your portfolio performing? Are you invested for the long term?

Like everything in life, there is balance. Moderation is key. Once the initial investment is made, again, either in money or in love, how we manage things thereafter will make the difference between catastrophe and loss or growth, wealth and security. Following are a couple of examples.

I once worked with a company that had a great 401(k) option comprised of several mutual funds of varying degrees of risk. We could determine how our investment and any matching monies were distributed between the funds we selected. We had the ability to manage the money between the funds, we could reset the percentage of each investment, which occurred each and every pay period, as often as we liked. The account manager would visit the company once a year and update us on the market, the funds, and provide some guidance with our investment “strategy”, and his favorite saying was “set it and forget it.” In other words, he recommended selecting funds based on what decade of life we were in, a “balanced” approach, slanted more aggressively for the younger folks and more conservatively for the older folks, and somewhere in between for the folks in between. The company I worked for was a high-tech start up company, focusing in surgical robotics. The company was made up of the best and brightest minds in business and the best and brightest minds in engineering. And a few other people, too. Over the months and years, three very different investment strategies evolved, and not as the fund manager suggested, basing level of risk on proximity to retirement. One group of people “set it and forgot it”, never reviewing performance or trends, and, as you might expect, when developments in the market occurred, they incurred more losses than they would have had they been a little more committed to paying attention. The second group shuffled their investments, the percentage of their withholding to each fund and every minute detail on almost a daily basis. They, too, lost more than they gained and drove themselves mad in the practice. The third group made their initial selections, reviewed performance quarterly or so, paid attention to the market and trends and made minor adjustments here and there. This third group saw much better growth over time than the other two.

In relationships, “setting it and forgetting it” will reap similar results to what I described above. Things change whether we are paying attention or not. While we shouldn’t overreact to every tiny little change, we need to be aware of the shift in trends in our relationships; jobs, kids, careers, health, wellness, lifestyle, just to name a few. If we fail to nurture the relationship, as with our portfolio, if we don’t revisit it, we are likely to suffer losses. Investments and love were never meant to be on autopilot. Likewise, we can’t just “dump a lump” into a ten-year “high yield” certificate of deposit and expect to retire in comfortably and securely, unless we’re starting with millions of dollars to invest. In a relationship, if you invest and ignore it for ten years, your “high yield” may not keep up with the rate of inflation or the changes in the economy of love. In love, like money, paying attention pays long-term profits.

On the other end of the spectrum; over-managing our investments, whether love or money, can have devastating results. In the company 401(k), the folks who constantly manipulated their investment strategy actually fared, long-term, worse than those who were of the “set it and forget it” ilk. By being reactive to every fractional fluctuation, to every tidbit of propaganda, hype and hysteria that some people call, “the news” and to every investing analyst’s utterance, there was never enough consistency with any one fund to reap any reward. At all. This is not much different than day trading. Yes, insane amounts of money can be made in day trading, but it is a lifestyle that many simply cannot sustain. My personal experience with day trading is a tale of catastrophic loss, and not just money. My husband decided to begin “day-trading”, which I also like to call “gambling”, when he abandoned his successful software consulting business after nearly twenty years, letting it wither and die rather than retool and market. He followed his passion, which I supported, into real estate finance, at precisely the wrong time of the century. Day trading with the equity in our homes became “our only hope”. And, it may have worked, had he the gumption, bravado and risk adversity for such a gamble. Five years later, the equity is gone, the savings is gone, the retirement nest egg is gone, the college fund for the kids is gone, the real estate is gone, and his family is gone. It wasn’t just his risk adversity that cost him, it was the level of devotion to his trading that cost him. He was unable, well, unwilling, to seek gainful employment that would “require” he work while the market was open. He was unwilling to contribute to the family in any way during the hours the market was open, like driving children to school, even when I was out of town for work. It was not a sustainable model even if he’d been able to press the button and make a trade.

One of the CPAs I worked with, a very wise man, one of the only people I know who aced the CPA exam, told me, time and again, based on his tax practice, never, ever, ever has anyone involved with day-trading been able to sustain their efforts successfully, for the long term. They either have to quit while they’re ahead, which, considering it has an appeal similar to gambling, is not likely, or they will eventually lose everything.

Okay, love is no different. If we invest all we’ve got and then micromanage every aspect of the relationship, wringing our hands at what’s at stake, analyzing and overanalyzing every little uptick or downturn in the chart, we will never be able to sustain the relationship to our liking and we will eventually lose everything. At some point, we will blow it and buy when we should sell, or sell when we should buy and we’ll completely blow everything we’ve got invested. We cannot change people, and we should never “invest” in a relationship if we expect the other party to change. We must “invest” because we think it is wise based on sound and solid grounds, not because we think we can make it work by tweaking every aspect of the relationship or the parties to the relationship, continually. Relationships and love, like investing in the market, should be nurtured. We should pay attention to our investments, add a little more to this “fund”, a little less to another “fund” based on careful consideration and feedback, and only as absolutely necessary.

In investing, we should always be reinvesting what is earned in the matter of interest and dividends, we should not frivolously spend our proceeds. We should also be investing additional amounts, on a regular basis, to be sure our portfolio grows to sustain us through hard times and to provide for us through our golden years. We’ll never have wealth and prosperity if we invest a hundred bucks once and never add another penny, no matter how long we ride the market. If we are able to set aside amounts at regular intervals to add to our nest egg, we will be able to accumulate a nice amount. Again, love is no different. The initial investment is important, yes, but reinvesting and making regular contributions will add exponentially to what is earned and to what is accrued.

The portfolio approach to love. We should “invest” in a relationship based on careful consideration and with any eye towards long-term growth. We should manage our investment by nurturing the relationship based on shifts, trends and feedback and much consideration and discernment. We should never just set aside our investment and assume, in neglect, it will accrue interest. The interest we accrue should be reinvested, not foolishly squandered. Like the companies we invest in, the stock we buy, the funds we participate in, with knowledge, maturity, wisdom and respect, our investment in love, in our relationships, will flourish and grow. We will find security and prosperity and a life of wealth, rich with love and joyful experiences. For the long term.

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