Why investing is like dating

Investing and romance are two completely different disciplines of life but look closely and you will start seeing a lot of similarities. They test your skills, patience, commitment and understanding of what you are getting into.

Investing like dating can have good and bad experiences, with many ups and downs. Read on to explore the commonalities as InvestmentYogi takes a look at romancing investments.

Casual dating for the short-term
                 
Casual dating is a whirlwind of excitement and fun. It is a time when the freedom of youth is expressed and you have a window of opportunity for a non-committal relationship.

Short-term investments like casual dating will always have a trade-in between risk and return. There are no guarantees in a short-term relationship of what you will get back from the investment of your time, money and emotions.

Often the cost far outweighs the benefits.
                 
Young adults can afford greater risks to both their financial portfolio and their hearts. It is never fun to feel the pinch in either place, but what can be learned will give valuable life lessons that can be turned into positive returns, in both areas.

Before you commit
                
As someone who has dated a lot of frogs (and married a prince), here are some simple guidelines for dating/investing etiquette:
                     
1. Simplicity in character is usually best

Just because it looks 'hot' and is great 'eye-candy' does not make it sweet.

Take the time to find out the qualifications of the stocks and mutual funds you are looking at investing in. Do they fit your plan as an investor? If not, move on. Keeping it simple can help you avoid a lot of heartache in the long term.

2. While dating and investing start small with less risks

If you are an inexperienced investor, it is wise to start with small risks while investing less money.

In both dating and investing, have fun, learn what you can and be open to cutting the losses if the investment is not working out. Gaining the help and expertise of someone with more experience is not a bad idea. There are many sites on the Internet that have free online financial planning. InvestmentYogi for one!

3. In money and love, striking the right balance is a key factor

Investing and dating share a common thread in the need to strike a balance. In either area you need to look at what is your comfort level or how much are you willing to risk. Often, your age and life circumstances play a major part in the decisions you are willing or able to make.

Being honest with yourself and finding the balance that best suits you will be the best gift you can give yourself and will improve your chances of success in the long run.

4. Take the time to evaluate your dates and your investments

Believe it or not, dating does have an expiry date. You need to evaluate your personal and financial portfolio every once in a while.

Does your portfolio still meet your requirements? Is there anything that is missing or needs to be given a little more of your time for a closer review?

By taking the time to evaluate your financial and personal investments, you can make improvements in important areas and make changes where needed.

Long term commitments
                             
Those of who you date are often the ones you will marry. Marriage, like long-term investments, takes time and patience. You don't ditch your spouse after the first falling out.

You take the time to get to know them and over time you develop a long and lasting relationship. Very few couples that have been married over a long period of time will tell you that every year was bliss.

But I have noticed the longer the couple has been married the less the need to talk about the 'low or down' times, because the return on the investment has started to pay off. By picking a good investment in the initial stages of the relationship, remaining calm in the down times and giving your investments an opportunity to grow, you will reap the benefits overtime.

Happily ever after
                 
It is important to remember that neither love nor money is a fairy tale. Rarely is there a fairly tale ending when the frog becomes the prince.

Careful consideration, patience and time are crucial in any relationship, be it your financial portfolio or your heart. So, take your time, do your research and invest wisely.
                    
As a bonus it does not hurt to take the advice from those with experience in both areas.