A Market Runs Through It.
Fly fishing is addicting. It’s more religion than a sport for many. The attraction to fly fishing, in addition to catching the fish, is all the gear - rod, real, line, leaders, waders, snips and flies.
A River Runs Through It isn’t a fly fishing movie, per se, but it does show amazing scenes on the Blackfoot River. If the fly fishing scenes in the movie don’t get you excited, nothing will.
The river I fish is nothing like the Blackfoot. It’s a slow, meandering river. The water is dark and murky and I have no idea where the fish are hanging out. I cast a lot and I’m forced to be patient. I cast. I wait. I cast. I wait. On occasion I will pull a nice little fish out of the water.
What does fly fishing have to do with investing? A lot.
My time on the water begins the evening before when I build my plan. Where to fish? What rod to use? What’s the best fly? Planning is important. It doesn’t matter if you’re fishing or investing a thoughtful plan will increase your chance of success. Your plan will make both activities more enjoyable.
Investing, like fishing, requires persistence. Persistence brings patience. Patience gives you discipline. Discipline will make you a better investor. It would be nice to catch a 20-pound bass with every cast but I know it’s not likely to happen. On most casts I come up with air and water. It’s important to keep casting because the only way to catch a fish is if the fly is in the water.
The fly is half the fun in fly fishing. Choosing the right fly is part of the challenge. What fly to use - popper, dragon fly, minnow, crawfish? I’ve used them all at one point or another. A diversified box of flies is a must because conditions change quickly. The markets change quickly as well. A diversified portfolio of stocks, bonds and cash will keep you ready for most market conditions.
A wind knot is not fun. A tangled line is downtime. When I’m confronted with a wind knot I have two choices. I can untangle the knot or cut the line. I’ve done both. During my downtime I review my goals. Should I keep fishing? Am I in the right spot? Do I need to add a heavier line? When the market corrects and your portfolio is in a knot what do you do? You can’t ignore a wind knot when fishing. It has to be dealt with. A market correction is the same. It must not be ignored. Use a correction to review your holdings and goals.
Hiking to the lake or river can be just as fun as fishing. Investors seem to be in a hurry to arrive at their final destination. Take time on your journey to enjoy the view. Investing is a lifetime event. It doesn’t start with your first job nor does it end with your last. Investing is generational.
Planning, persistence and long term thinking are needed for fly fishing and investing. If you practice these things, you’ll be hooked for life.
If fishing is a religion, fly fishing is the high church - Tom Brokaw
Bill Parrott is the President and CEO of Parrott Wealth Management, LLC. www.parrottwealth.com.