3.  IT DOESN’T HAVE TO BE COMPLICATED TO BE EFFECTIVE

Dating: For many people, the best dates are the simple ones- like the times spent on the couch during a cold winter night, watching a classic Bogart movie with, of course, hot chocolate and an extra large bag of Fritos nearby. While dining at Nobu certainly has its place, looking back on all the great dates we’ve had, likely reminds us it’s the simple ones that counted the most.

Investing: When it comes to investing, many of the most successful investors I’ve helped are those with the simplest portfolios. On the other end of the spectrum are investors that spend every waking hour chasing returns, analyzing complicated charts, dissecting corporate balance sheets or scouring the market on a daily basis – searching endlessly for a ‘perfect’ buy.

Lesson Learned: There are roughly 15,000 mutual funds in the country with approximately two professional fund managers each. Of those 30,000-ish fund managers, guess how many have beat the static, mindless S&P 500 index more than ten years in a row? Answer…?  …. Get this:  Just one. Legendary Bill Miller from Legg Mason. Undeniable statistics prove that the S&P typically out-performs over 80% of managed mutual funds year after year, leading the sharp ones to realize that when it comes to efficient and successful investing- it rarely has to be complicated to be effective.

4. CUT THE LOSERS, RIDE THE WINNERS

Dating: The first handful of dates were the stuff legends are made of, but by the time mid terms rolled around, Crazy Mindy crashed my roommate’s car, emptied his bank account, shredded his classic Dark Side of the Moon poster, caused him to miss the Macro Econ final and managed to give him one very fat lip.  By graduation, my roommate ended up blowing his entire senior year trying to turn Crazy Mindy into the person she once appeared to be.

Investing: On paper, the company looked like a true winner. Not only was the stock going through the roof, but even Madonna used the company’s products. But thanks to a deadbeat CEO and a few federal regulations tossed in, the stock began a perpetual downward spiral.  Convinced it would come back, you held on, only to wake up realizing you would have been far better off giving Crazy Mindy your money to invest!

Lesson Learned: Crazy Mindy couldn’t care less about my roommate and likewise- your stocks couldn’t care less about you. They don’t know who you are or why you fell in love with them.  In love or money, when something isn’t working -  get out.  Just cut the losses, move on and live to fight another day. The quicker you do that- the better things typically turn out!

5.  DON’T GIVE IT UP ON THE FIRST DATE

Dating: Dinner at The Palm was sublime.  The guy made you laugh, he held the door and those three Grey Gooses even made him look like Brad Pitt. But back at your place, just as the room sweltered to high noon out on the Serengeti, your mother’s voice politely whispered to you- “Not on the first date.” Wisely, you pushed back and let something called time nurture the relationship.

Investing: The financial advisor seemed like a nice guy. He showed you attractive rates of return, sported a Tom Cruise smile, and even served Italian cappuccino in fancy bone china with nice pretty lace doilies to match. So you rolled the entire 401k into an IRA, only to later realize it cost you a monster upfront commission on high fee investments that caused you nothing but losses to boot.

Lesson learned: Treat your money like you’d treat your body, and don’t give it up on the first date. Taking time to nurture a relationship will not only make your mother proud, but it will certainly provide you with one of the most important keys to financial and dating success.

6. DIVERSIFICATION IS THE KEY TO SUCCESS

Dating: Adam looked like Alan, Alan acted like Arnold, Arnold smelled like Arnie and Arnie reminded you of Alex. And just when you thought you found the Perfect-A, Aden stood you up just like Albert and Abe once did (or was that Alfonso?). It was then, in one fleeting moment of revelation, you finally realized the problem had nothing to you, but everything to do with any guy whose name starts with the letter “A.”

Investing: Dot-coms ONLY… Late 90s. … Need I say more?

Lesson Learned: Diversifying your investments is a critical key to investment success. Load up in one sector or stock, and it’s not a question of if disaster will strike, it’s a question of when.  Spread your risk, diversify your investments into the prudent, timeless fundamental asset classes, and of far more importance, consider dating guys whose names start with other letters of the alphabet.

CONCLUSION

Bad date? Who cares! Next time something doesn’t turn out so well, simply shake hands with your date and thank them for making you a richer person.  After all, when it comes to love and money, hopefully you’ve learned- it’s all pretty much the same!

For more on Alan Haft, please check out his website www.alanhaft.com.

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