While it may seem that fishing and investing are completely unrelated, believe it or not, there are some characteristics that make a person good at fishing that can also transfer to investing. Here are six fishing lessons you can apply to your investment strategy.
Patience
Patience is necessary to find a good fishing spot. And patience is definitely required while you wait until you have a fish securely on the line. A fish might get away if you react too quickly to some nibbles on the bait!
In investing, patience may help you avoid emotional overreactions to short-term market fluctuations or prevent you from making rash decisions.
Focus
Many anglers have a favorite spot to return to on a regular basis. If you know a good fishing spot where the catch is abundant, you might keep quiet about it and go there as often as possible.
In the same way, investors who have the ability to focus can conduct thorough due diligence on potential investments. This level of observance and focus can help investors be more informed about risks before they invest.
Determination
Some fish are too big to reel in. Others are too small and must be put back. Only some fish are keepers. In the end, you need the determination to keep fishing to get a good catch.
Investing is exactly the same. The keepers for investing are those investments that continue to produce a decent return, one that’s consistent and grows over time. The famous value investor Warren Buffet says his favorite time horizon for owning a company is forever.1 If he finds a value investment according to his criteria and it continues to perform, he never intends to sell the shares.
Adaptability
An important skill for those who fish is being open to change. Over the years a fisher’s goals, locations, tactics, equipment, and even clothing may need to change to keep the hobby alive.
Similarly, savvy investors are always on the lookout for opportunities and aren’t afraid to adapt. As markets change, investors must be flexible enough to embrace the changes by responding with a new approach as needed. They recognize that past results are typically no guarantee for the future.
Education and Training
Fishing at first may seem easy. For many, you just need to pay the entry fee for a stocked lake and rent a fishing rod. Then, you bait the hook, drop the line, and catch a fish. Other fishing styles, such as fly fishing, require considerable skills. To be accomplished at fly fishing, you need to practice for hours, invest in the right equipment and even potentially do some reading on the subject2.
Just like with fly fishing, investing into more complex accounts like index funds requires preparation. Advanced investing also demands skills, experience, education, and the proper tools. Anything more than basic investing will require new investors to arm themselves with knowledge and experience to invest appropriately, and a financial professional can offer that type of assistance.
Getting Help
Having a fishing mentor can be fun for those new to fishing. A mentor can help you learn more about the sport and feel supported and motivated. Investing isn’t too different. Investors often work with financial professionals to learn more about investment strategies to consider and to get the support and motivation they need.
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Footnotes
1 Warren Buffett's Investing Strategy: An Inside Look, investopedia.com, https://www.investopedia.com/investing/warren-buffetts-investing-style-reviewed/
2 Is Fly Fishing Hard? 7 Things You'll Need To Learn, https://flyfishingfix.com/is-fly-fishing-hard-to-learn/
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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