What the Stock Market Can Teach You About Dating

But as I grew up and started dating, I realized that many of my dad’s financial maxims applied to more than just, well, finances.

They also helped me with some particularly vexing mysteries about love and relationships.

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Even if he didn’t realize at the time that he was teaching me about women, here are a few nuggets of dating advice from my dad. They may just help you find money or your next relationship.

1) “The first piece of bad news is never the last.”

Enron didn’t just go bankrupt overnight. There was first a question about accounting, followed by a restatement of profits, then another, before anyone realized the whole enterprise was a house of cards.

When it comes to corporate malfeasance, there’s never only one cockroach, which is why experienced investors tend to sell with both hands at the sign of a scandal.

If only we had the same discipline when it comes to dating.

Trust your instincts. Nobody is perfect, but there’s a big difference between a minor personality flaw and a red flag. You know the difference.

If she lets it slip that her divorce technically isn’t final, and her husband is her “roommate,” and he’s a cop, it’s definitely time to make a hasty retreat.

2) “If you can get your hands on a hot IPO, you probably don’t want it.”

Each season there is a sexy new IPO that hits the market. Everyone and their brother wants in on it. So if your broker tells you he’s managed to get you an allocation, you should probably run the opposite direction.

The value in a hot IPO is its scarcity. Once you have access to it, you can be pretty sure scarce is the last thing it is.

The same is true of the gorgeous 5’10” model who can’t stop eyeing you.

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Sure, it’s possible she’s the one person who finally appreciates your unique sense of humor, and believes that app idea you have will be the next SnapChat—all from just a glance across a bar. But then again, no, probably not.

Learning to recognize the difference between reality and “too good to be true” fantasy can save you from a lot of heartbreak.

3) “Never add to a losing trade.”

When a stock you own falls in price the temptation is to buy more. This is called “averaging down.” By buying more at a lower price, it reduces the break-even point.

It’s rarely a good idea. Stocks that are dropping tend to continue dropping. Congratulations! Now you own more of it.

There’s a similar temptation when it comes to dating. If a relationship you care about isn’t working, the tendency is to commit more to it, hoping the prospects will change.

Getting engaged will force you to be committed. Having a child will bring you closer.

Uh, no. Land wars in Asia have a better chance of success.

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4) “If you wouldn’t feel comfortable owning a stock for 10 years, don’t own it 10 ten minutes.”

This investing philosophy is a favorite of Warren Buffett. The legendary investor is renowned for passing on a quick buck made off the latest fad in favor of companies that offer slower but steadier gains.

What could the Oracle of Omaha’s wisdom possibly have to do with dating?

The more time you spend with someone you know isn’t right for you, the less time you have to find someone who is.

Granted, this is the age of Tinder, where moments of weakness have never been more easily indulged, so at the very least. . .

5) “. . . don’t let your bad trades turn into investments.”

What trader hasn’t given in to the temptation to buy a stock just for a quick pop?

Even though you knew full well the company was lousy, you’d be out of the trade long before it mattered. Except everyone else had the same idea.

Soon you’re staring at a big red number in the profit/loss column. But instead of selling the stock you had no intention of owning in the first place, you try to rationalize why the company is suddenly a decent investment.

Sadly, this is not all that different than the one-night-stand gone awry.

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A person that was meant to be a sexual placeholder, by sheer time spent together, can easily morph into a significant other.

It’s not just that life happens while you’re making other plans. Long-term relationships do, too.

6) “Good trades tend to work from the start.”

It happens to every trader. A stock has been on a consistent trajectory upward, but the second you buy it, it does a 180.

It’s as if somehow the market knew.

Occasionally, these stocks come back. But even if they do, it seems that every penny is a struggle.

Most traders’ biggest winners are the most effortless. The profits started ringing up from the get-go. When they don’t, that’s often a sign.

If you’re arguing with someone right off the bat, chances are you’re not right for each other.

Sure, you could make it work. But every day will be a slog.

Maybe that’s what people mean when they say they “just knew.” A relationship with a bright future should never be a struggle.

via Men’s Health

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