Good fishermen are like good investors: They are always trolling for opportunities. They use a wide variety of tactics and rely on proven science to make informed
Just like great anglers always have a line in the water, successful investors always have their capital deployed somewhere.
Patience is a key to successful investing and fishing.
As some of you know, I spend as much of my free time as possible on a trout stream. I suppose fly fishing is a lot like meditation. When you’re on the water, it’s tranquil. It’s hard to think of anything other than the small “fly” on the end of your line that rides softly along the current. In my fishing-induced meditative state, sometimes my thoughts turn to what makes some investors more successful than others. One day on Spring Creek outside of State College, Pa., I started to think about the qualities that made someone both a good fisherman and a successful investor. The more I thought about it, the more the two disciplines seemed to have in common.
Here are some of the qualities that I find most important:
You won’t catch a fish unless your fly is on the water. I find it interesting that fishermen who complain about not catching fish are those that sit waiting on the riverbank for the perfect set of conditions. It’s got to be just the right temperature, current, time of year and time of day. And they’ve actually got to see the fish eating or they won’t consider making a cast. It doesn’t matter if trout consume about 80 percent of their diet under the water’s surface. They want to see them eating. Investors are similar. Successful investors always have their capital invested. They know that waiting for the perfect conditions leads to lost opportunities.
Successful fishermen have diverse tactics and a tackle box full of varied flies, ties and leaders. A successful investor is no different. Their tactics may include loss harvesting and rebalancing when appropriate and they always invest in a broad portfolio of investments.
Successful fishermen are patient. To a successful fisherman, having a fly caught in a tree or a tangled line is only a temporary impediment to getting your line back on the water. Good investors are the same. They realize that all investments ebb and flow. They don’t let a short-term tangle distract them from their long-term objectives.
Great anglers rely on science to make informed decisions. When fishing, things like water temperature and pH levels are important considerations and offer important clues about where to find fish. It’s the same in investing. Using evidence like the cost of capital to inform your investment decisions has the potential to improve your results.
Whether fishing, investing, or pursuing your other life passions, always be actively engaged. Use a wide variety of tactics. Be patient and rely on science to make informed decisions. That way, you’ll find happiness on the stream, in your financial statements and throughout your life.
If you’re not an avid fly fisher, these parallels seem like a stretch. But the more you think about the similarities, the more they seem obvious. If you’ve never fly fished before but always wanted to try, contact me any time at firstname.lastname@example.org. I’m always looking for opportunities to introduce people to a great pastime. Chances are you’ll be hooked.
Modera Wealth Management, LLC (“Modera”) is an SEC-registered investment advisor with places of business in Massachusetts, New York, New Jersey, Pennsylvania, North Carolina, Georgia and Florida. Modera may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. SEC registration does not imply any level of skill or training. For information pertaining to our registration status, fees and services, please contact us or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov) to obtain a copy of our disclosure statement set forth in Form ADV Part 2A. Please read the disclosure statement carefully before you invest or send money.
This article is limited to the dissemination of general information about Modera’s investment advisory and financial planning services that is not suitable for everyone. Nothing herein should be interpreted or construed as investment advice nor as legal, tax or accounting advice nor as personalized financial planning, tax planning or wealth management advice. For legal, tax and accounting-related matters, we recommend you seek the advice of a qualified attorney or accountant. This article is not a substitute for personalized investment or financial planning from Modera. There is no guarantee that the views and opinions expressed herein will come to pass, and the information herein should not be considered a solicitation to engage in a particular investment or financial planning strategy. The statements, information and opinions expressed in this article are subject to change without notice.
Investing in the markets involves gains and losses and may not be suitable for all investors and should not be considered a solicitation to buy or sell any security or to engage in a particular investment or financial planning strategy. Individual client asset allocations and investment strategies differ based on varying degrees of diversification and other factors. Diversification does not guarantee a profit or guarantee against a loss.