Many would argue that there are only a few emotions that equate to the feeling of sitting on a beach. There is just something about that atmosphere that could almost be considered thrilling. In that same vein, a copious amount of people would argue that there are only a few emotions that equate to the feeling of playing the stock market. There is just something about that atmosphere that could almost be considered thrilling. Aside from the identical stimulating vibe that these two concepts emit, what is it that makes them a direct comparison for each other? While there may not be bears or bulls running along any beach, these two topics may have more similarities than you might think.
Arriving.
That fresh, salty air is one of the first aspects of ocean living that we recognize upon our arrival to our destination. It is a scent that pronounces a feeling of excitement and joy. All of the planning that went into travel time, lodging research, restaurant reviews, etc. is finally at our fingertips. It all begins when you reach that friendly little town. While that salty scent is not evident while investing into the market, that feeling of excitement and joy is definitely present. All of the planning that went into risk analysis research, finding the next “big thing,” time spent on Seeking Alpha, etc. is finally at our fingertips. It all begins when we eventually decide to invest.
Restaurants and shops.
After all of your research has been completed, it is time to pick the restaurants and shops to visit. Because there are so many choices, it is often hard to pick the best places to eat and the best shops to spend time at but once you have committed, you have either made a good decision or one that you will regret. The same exact thing goes for stocks, mutual fund, ETFs, etc. There are so many to choose from but when you make your choice, you are stuck with it.
The ocean.
Ah, we have reached the open sea! Although the topic at hand revolves around metaphors between a beach town and the stock market, do not mistake calm, vacation ocean waves as comparisons for the stock market -- this is not always the case. Instead, view the market’s ebbs and flows as an unpredictable shift between a serene lagoon and a midnight storm that is about to capsize a fleet of ships. This nautical image would be a direct representation of the fickle idea of volatility. In short, the way that the unpredictable tide moves about is an exact replica for that of the ever changing marketplace.
Shells.
There is a beautiful little thing that many companies offer shareholders if they have stake in their company. That beautiful little thing is known as a dividend. These clumps of gratitude come in all types of yields -- big, small, and anywhere in between. While different aspects of the market gives back to consumers, the ocean also gives back to it’s investors in a small way. This can bee seen as sand, shells, glossy rocks and basically any natural keepsake that ends up on the bottom shelf of a dining room cabinet. These two come in all shapes and sizes. Some may even go as far as to say that these keepsakes are the dividends of the sea.
The locals.
One group of people that are often overlooked in reference to any vacation are the people that live at your destination all year round. In our case, these people would include, restaurant owners, fishermen and hotel managers, just to name a few. The sad thing about these individuals is the fact that they are very underrated. The majority of vacation-goers do not understand that there would be no vacation without these locals that work long and hard to serve us. The same exact thing goes for those individuals in the financial field. Many times we do not know our own brokers; we do not know who is adjusting our mutual funds; and we do not know anything about the people who are managing our life savings to begin with. Perhaps we need to take some time out of our day to at least thank those who tend to work for us, whether that be the hospitality or financial sector.
Leaving.
Once you pile back into that car and smell that salty breeze for the last time, one of two things will be going through your mind. The first of these ideas will be something along the lines of, “That was great, I can’t wait to do it again.” The second will be in the realm of, “That was horrible. Better luck next time, I suppose.” These two different expressions are the exact same phrases that you will use when exiting the market. If you are about to turn a profit, you would use the first expression. If you are trying to get out without losing more money than you already have, use the second. In other words, whether you are leaving the beach or leaving the market, you are bound to end up feeling either pleased or disappointed.
Now, the whole point of a vacation is to take the stress out of everyday life and perhaps take a new perspective on certain concepts for the time being. Hopefully, the next time you are on a beach, you reflect upon the metaphor that you are tanning on. However, if you work in the finance industry, forget you ever read this-the beach will now seem like work.
