Learning to invest vs Investing to learn

The Calm Investor | Learning to Invest

Learning to Drive

You’re on a fairly empty side-street, your cousin, an experienced driver next to you, in the passenger seat. It is her 8-year-old Fiat Punto, but the make or model doesn’t matter to you, just that it’s a functioning car. You don’t know if you will enjoy driving, but you want to be able to.

You don’t know if your cousin is the “best” driver around, but you know she’s been driving for a few years and you trust her. She instructs you step-by-step to first push the brake, turn the key in the ignition, press down on the clutch pedal, engage 1st gear. Then, to gradually release the clutch for the axle to engage and for the car to start moving. You do as she says, except you take pressure off the clutch too quickly, at which point, the car lurches and the engine dies. She repeats the instructions, emphasising the importance of letting the clutch out slowly.

You repeat the sequence, concentrating extra hard now, and manage to get the vehicle moving, moving up the gears into 2nd and then 3rd. You’re driving! Your senses are consumed with managing the accelerator, brake and clutch along with the steering to keep the car from stalling and moving in a straight line. Your instructor warns you from time-to-time about other traffic.

You watch other drivers effortlessly zoom by, some not even seem to pay that much attention. You worry about never being as good as them, being able to track so many variables at the same time and to act decisively. Yet, you trust the process.

From there, as the basics of controlling the vehicle became more natural, you start paying more attention to traffic, to driving on busier streets and highways. You do not have to pay as much conscious attention to the basics of controlling the vehicle and instead started looking for gaps in traffic, for slow-moving trucks moving into your lane so you switch lanes well in advance, for optimal speeds that maximised mileage. 

Over time, you discover your driving preferences, your driving style.

Whether to you, driving is just a means of conveniently getting from point A to point B or a cathartic collaboration between man person and machine. A machine carefully picked and honed so you hear (and feel) either the refined purr or the throaty rumble as you press the accelerator.

Whether you enjoy threading through urban obstacle courses, so what if the occasional hour is spent in gridlock (that’s what FM radio is for).

Or whether it is really about the open road, where you can let the horses under the hood run (almost) wild, devouring hundreds of kilometres at a stretch.

Maybe it is a bit of all of them or none of them and something completely different. No one really knows, except you. 

You drive to learn.

Learning to Invest

After some procrastination you sign up for the trading account your relationship manager had been calling you about. Whether it’s the “best” platform out there doesn’t matter to you. You don’t know if you will enjoy managing your own money, but you’d like to be able to.

You know there are 40,000 book titles tagged ‘Investing’ on Amazon, plus a few thousand investing blogs. Instead of waiting till you have read all of them, you get started. To get started, you apply common-sense universal rules and buy financially sound large-cap low-debt companies offering consistent growth. You’re investing! The day after you buy, your stocks drop in price. It bothers you.

You hear/read of investors making triple-digit returns, being sought after on financial and social media. You worry about never being as good as them, being able to track so many variables at the same time and to act decisively. Yet, you trust the process.

From there, as the act of investing comes more naturally, you start paying more attention to overall market sentiment. You notice days of buying or selling frenzy and learn to not get caught up. You notice the impact of growth themes triggered by budget speeches, buzzwords, quarterly announcements on stock prices far outweighing long-term prospects. 

Over time, you discover your investing preferences, your investing style.

Whether to you, investing is just a means of building long-term wealth, or a fulfilling endeavour of discovering your very own investment philosophy and style, as unique as your fingerprint.

Whether it’s the thrill of decoding the instantaneous information other market participants send your way in the form of moving averages and new highs to nimbly step in and out of positions.

Or whether it’s about identifying little-known under-valued potentials that you don’t mind if not discovered by the majority for a while.

Or maybe it’s the large-cap contrarian bets lying in plain sight that get your pulse racing.

Maybe it was a bit of all of them, or none of them and something completely different. No one really knows, except you. 

You invest to learn.


Further Reading:

Buying your first stock

Seven life learnings for investors

Rules for focussed success in a distracted world


What do you think?