Why Investing is Like Surfing

Written by The Dividend Guy on February 23, 2008

Surfing

Being the investor geek that I am, I of course had thoughts of dividend investing pop in my head on a recent vacation to Hawaii while I was trying my hand at boogie boarding. After doing a bit of research on the web, I realized that many of the “rules” or etiquette in surfing applies well to investing. Here are some of the more common things beginner surfers need to learn and how they apply to novice or experienced investors.

Alcohol

Surfing under the influence of alcohol is never recommended. Picking stocks under the influence of alcohol is not recommended either.

Be Aware

Be on the constant lookout for other surfers, rogue waves, or other hazards. Surfing can be very unpredictable. Investing too can be unpredictable. You need to constantly be aware of what is happening, otherwise you run the risk of getting crushed. This is especially true for those of us that choose individual stocks. There will be things that will come out of nowhere that you will not expect. Just knowing this alone can help you with your investing.

Comfort Zone

Start with waves you are comfortable with and don’t get in over your head. Same goes for investing - don’t go shorting stocks or selling covered calls without some experience under your belt. My suggestion is to build up that core portfolio of index funds before moving to selecting individual stocks.

Hold or Throw

Know when you should hold on to your board and when you should bail and let it fly. Although I rarely sell stocks if at all, there will be times when bailing will be the best strategy at the time.

Practice

If you want to improve your surfing, then you need to practice. If you want to be a better investor, you need to practice. And sometimes this means not actually buying a position, but rather holding a mock position.

Wave Ownership

This is the rule that differs the most between investing and surfing. The person closest to the breaking part of the wave has the right of way in surfing. In investing, I don’t really knows how this applies, only to say that it is every person for themselves and it is probably better to realize that there are more people trying to screw you than help you!

I would rather be surfing!

(Photo Credit: Igor Kasalovic)


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