Forrest Gump is one of my all-time favorite movies. Every time it is on TV, I just have to watch it. I find myself quoting lines from the movie all the time!
The movie is full of fantastic life lessons. I also believe there are some great investment lessons to learn from simple gazillionaire Forrest Gump. So here's a few great quotes that provide timeless investment lessons:
Life is like a box of chocolates. You never know what you're gonna get.
Investing is the same way. There's always another crisis around the corner. Let's face it, there are only certain things we can control. You cannot control the 2008 Credit Crisis, hurricanes, dot com bubbles, housing bubbles, Middle East turmoil or the price of oil. However, you can control how you react to these crises. You can also control whether it causes you to make changes to your portfolio. Work on controlling things like fees, your asset allocation and how much you choose to invest. Stop worrying about things that you have no authority over.
Stupid is as stupid does.
This means you are what you do. Forrest was called dumb most of his life, but that never stopped him from his incredible accomplishments. It's your actions that will determine where you end up. Your actions become habits, and good investment habits will determine whether or not your will reach your financial goals. So don't be dumb -- save, diversify, avoid emotion and pick a good advisor.
"It" happens.
We all know what "it" is. What I think Forrest Gump means is that bad things happen sometimes. For whatever reason, an investment doesn't work out. Even as a financial advisor for twenty years, and I don't always pick a winner, "It" happens to me too! Cut your losses and move on. Decide on a maximum amount you can tolerate losing and invest appropriately. I've seen way too many investors that say they will stick with an investment until they get their money back. That's a fools game and it may never happen. There's always another investment.
Lieutenant Dan was always getting these funny feelings about a rock or trail or the road, so he'd tell us to get down, shut up.
Investors sometimes think that since they have this feeling that an investment will go up, or the stock market is set for a correction, that they should listen to that little voice. If you think back, did that little voice help you or trip you up? That little voice is driven by emotion and not logic. Emotion is the enemy in the investment world. Rely on logic as much as possible.
The good part about being shot in the buttocks was the ice cream. They gave me all the ice cream I could eat.
While I'm not sure being shot in the buttocks was good, there is a great investment lesson to be learned. The money lesson here is sometimes the best thing you can do is not think -- don't obsess over an investment. Have the faith that the investment or financial situation will work it's way out for the best. I always crack up when Forrest offers Lt. Dan ice cream and he sticks it in a bed pan!
Lieutenant Dan got me investing in some kind of fruit company. So then I got a call from him, saying we don't have to worry about money no more. And I said, that's good! One less thing.
I think we all wish we had a few shares of some kind of fruit company. No, the lesson is not about lucking out on the next great tech... uh I mean fruit company. The investment lesson here is trust your investments to wise advisor. I don't know if Lt. Dan managed the money or not. Seek an advisor that has experience, good credentials and puts their clients first. Picking a wise steward of your money will allow you to worry about one less thing.
So now you know some investment lessons from Forrest Gump himself. Timeless investment lessons from this simple guy. If you like my article, subscribe here for free! I'll deliver my newest article to your inbox every Friday. As Forrest would say, "That's all I have to say about that."
