Sunday, March 21, 2010

Five Parallels Between Weight Loss and Investing in the Stock Market:

The end result may be different, but the methods are the same. As the saying goes, “Methods are many, principles are few.”

By Seth Bronheim, with market insight from Gary Bronheim

1. Successful investors, and successful people who lose weight, both think long-term. They ride the highs and lows of the stock market, and/or the ups and downs on the scale. They don’t let overeating one day discourage them, or throw them off their game plan. And if the stock market goes down in the short term, the successful investor will ride that decline, or even buy more stock at the lower price. It is never about how much money one can make this week, or how much weight one can lose this week. The successful investors, who make money and keep it, and the successful people, who lose weight and keep it off, think long term.

2. People who invest and lose money say, “Oh G-d, please just make me even!” People who gain weight and want to lose it say, “Oh G-d, if I could just lose those five pounds.” In the end, you are responsible for your actions. You don’t control the stock market, but you did decide to invest in it. And you can blame your weight gain on the hidden calories in foods (like at restaurants), but you chose to eat it. You are responsible for you.

3. In investing and weight loss, many people get involved in either the “get rich fast” scheme, or the “lose ten pounds in ten days” diet. But those “in the know” do not get hoodwinked by these schemes, they know how to get what they want, and what actually works. The bottom line is: don’t fall for trends, fads, or schemes that sound too good to be true.

4. You have to have patience when investing and when losing weight. Stock prices don’t just rise in a linear fashion. They can rise or fall within the same week. Weight loss is also not linear. When you begin a weight loss program, you may lose weight each week and the amount will usually be different. Many experts recommend that you lose 1-2 lbs/week for safe weight loss. But this is not what happens in the real world. One week you may lose 4lbs, and the next week you may only lose 1lb or gain 1lb. You have to stay patient and consistent with your plan. The body needs time to change shape and lose fat. Give your body the time it needs. Weight loss is like the hatching of an egg. All of these changes are occurring inside the egg, but you can’t see what’s happening on the inside. It is imperative that one understands that the body is making all of these internal changes, and it takes time for them to occur and for you to see any physical changes. By understanding this concept, you can maintain your sanity when you are on a weight loss plan.

5. One day, this man wakes up and says, “G-d, please help me win the lottery today!” This man then continued to ask G-d for this favor every morning. One day G-d eventually responds, and he says, “If you want to win the lottery, FIRST YOU HAVE TO BUY A TICKET!” If you want to bet that the market is going to go up, you can buy a call option. If you want to bet that the market is going to go down, you can buy a put. The point is that you need to make an investment to get what you want. Whether the investment is in buying stocks or options, hiring a nutritionist, or buying a lottery ticket, you need to take action to achieve your goals.

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