6 Things Dating Teaches Us About Investing

Bad date last night? Don't despair. It's not as badeach. Of those thousands of fund managers,
as you may think. Here's some good news: youguess how many have beat the static, mindless
may not know it, but when it comes to yourS&P 500 index more than ten years in a
money, that bad date can teach you an awful lotrow? Answer...? .... Very few. Statistics prove that
about successful investing.the S&P often, but certainly not always,
Think I'm joking? Think again. Although I was a farout-performs many managed mutual fund
cry from being the King of Dating, I did have amanagers each year, leading the sharp ones to
few albeit rare lucky streaks in me. And lookingrealize that when it comes to efficient and
back over those rare few times, my moderatesuccessful investing, it rarely has to be
success on the dating circuit did teach me quite acomplicated for it to be effective.
few things about prudent investing.4) CUT THE LOSERS, RIDE THE WINNERS
Here's a few quick examples...Dating: The first handful of dates were the stuff
1) DON'T JUDGE A BOOK BY ITS COVERlegends are made of, but by the time mid terms
Dating: The guy was over a half-hour late, hisrolled around, Crazy Mindy crashed my college
outdated shirt barely matched his Taco Bellroommate's car, emptied his bank account,
stained pants, the rain gave him a lethal dose ofshredded his classic Dark Side of the Moon
bed-head and back then the busboy was makingposter, caused him to miss the Macro Econ final
more than he was. If that wasn't bad enough, hisand managed to give him one very fat lip. By the
humor was a bit stale and the car he drove had atime graduation took place, my roommate ended
weird putter that attracted nothing but aliensup blowing his entire senior year trying to turn
from the evil Planet X. While at first the girlCrazy Mindy into the person she once appeared
thought it was going to be a dinner date fromto be.
fiery hell, little did she realize that guy was I, andInvesting: On paper, the company looked like a
I'd soon wind up being the one she'd marry.true winner. Not only was the stock going through
Investing: The receptionist was sure nice, but thethe roof but even Madonna used its products. At
carpets were dull and the musty furniturefirst the investment took off, but no thanks to a
reminded you of grandma's place in Brooklyn. Youdeadbeat CEO and a few federal regulations
were ready to take your money to that Privatethrown in, the stock began its perpetual
Wealth Management Firm --- the one with thedownward spiral. Convinced it would come back,
white marble staircase and baby grand --- butyou held on, only to wake up realizing you would
when the well-mannered financial advisorhave been far better off giving Crazy Mindy your
appeared, you figured you'd be courteous andmoney to invest.
give him a few minutes of time. A little into hisLesson Learned: Crazy Mindy could care less
pitch, you were most pleasantly surprised whenabout my roommate and likewise, stocks could
he touted low cost, tax efficient investments thatcare less about you. They don't know who you
perfectly matched your goals. It was then youare and only you can fall in love with them. Love
realized there's a reason the furniture in his placeor money, when something isn't working, get out.
is a bit out-dated, mainly, because the guy isn'tJust cut the losses, move on and live to fight
touting the high fee investments.another day. The quicker you do that, the better
Lesson Learned: First impressions can easily getthings typically turn out.
the best of us. Whether it's a date or your5) DON'T GIVE IT UP ON THE FIRST DATE
money, taking a step back to peek behind theDating: Dinner at The Palm was better than if
curtain will typically put both your money andyour Mets won another Series. The guy made
heart in a much better place.you laugh, he held the door and a shot of Grey
2) COSTS COUNTGoose made him look like Brad Pitt. But back at
Dating: She liked Dylan Thomas, idolized Ginsberg,your place, just as the room sweltered to high
despised the conformists and was clinicallynoon out on the Serengeti, your mother's voice
depressed that she missed last year's Montereypolitely whispered to you, "Not on the first date."
Pop Music Festival. The perfect 10 from down inWisely, you pushed back and let something called
the Village strummed an acoustic, wrote poetry"time" nurture the relationship.
and even donated your favorite Levis to aInvesting: The financial advisor seemed like a nice
homeless guy on the street. While at first lust gotguy. He showed you attractive rates of return,
the best of you, months after helping her pay thesported a Tom Cruise smile and even served
rent, her organic meals and for all those Warholcappuccino in fancy bone china with lace doilies to
movies you pretended to like, you were finallymatch. So you transferred the entire 401k into an
worn out, leading you to realize that when itIRA, only to later realize it cost you a huge
comes to dating, costs most definitely do count.upfront commission on high fee investments that
Investing: The mutual fund was barely moving.caused you nothing but losses to boot.
Five years into it, you just couldn't quite figure outLesson learned: Treat your money like you'd treat
why you weren't making much money. Then, oneyour body: Don't give it up on the first date.
fine day, you wisely took the time to researchTaking time to nurture a relationship will not only
the fees you were paying, only to realize the fundmake your mother proud, but it will certainly
was charging you way too much per year inprovide you with one of the most important keys
annual costs and causing you all sorts of taxes.to financial and dating success.
Lesson Learned: When it comes to investing and6) DIVERSIFICATION IS THE KEY TO SUCCESS
dating, costs most definitely do count. Taking theDating: Adam looked like Alan, Alan acted like
time to evaluate how much you're paying forArnold, Arnold smelled like Arnie and Arnie
your dates and funds is an essential part ofreminded you of Alex. And just when you
anyone's success.thought you found the Perfect-A, Aden stood
3) IT DOESN'T HAVE TO BE COMPLICATED FORyou up just like Albert and Abe once did (or was
IT TO BE EFFECTIVEthat Alfonse?). It was then, in one fleeting
Dating: For many people, the best dates are themoment of revelation, you finally realized the
simple ones such as times spent on the couchproblem had nothing to you, but everything to do
during a cold winter night, wearing soft flannelwith guys whose names start with the letter "A."
pajamas under a fluffy blanket watching a classicInvesting: Dot-coms, late 90s. ... Financials, 2008 ...
Bogart movie with, of course, hot green tea andNeed I say more?
a hearty bag of Fritos nearby. While dining atLesson Learned: Diversifying your investments is
Nobu certainly has its place in time, looking backa critical key to investment success. Load up in
on all the great dates we've had most likelyone sector or stock and it's not a question of if
reminds us it's the simple ones that scored thedisaster will strike, it's usually a question of when.
most.Spread the risk, diversify your investments into
Investing: When it comes to investing, many ofthe prudent, timeless fundamental asset classes
the most successful investors I've helped areand of far more importance, consider dating guys
those with the simplest portfolios. On the otherwhose names start with the letter A.
end of the spectrum are investors that spendCONCLUSION
every waking hour chasing returns, analyzingBad date? Who cares? Next time something
complicated charts, dissecting corporate balancedoesn't turn out so well, simply shake hands with
sheets or scouring the market on a daily basisyour date and thank them for making you a
searching endlessly for a perfect buy.richer person.
Lesson Learned: There are roughly over tenAfter all, when it comes to love and money,
thousand mutual funds in the country withhopefully here you've learned it's all very much
approximately two professional fund managersthe same.