Swimming and Investing have much in common. If you do not know how to swim, you will be stuck in deep waters and with dreadful consequences. Similar is the investment pool. You will land in a big mess if you have not done your basic learnings.
Just before you jump into a pool, you need to wear a proper dress in investing too you should have an expendable amount of money which you may lose but still not feel bad.
The next step in swimming is testing the waters and remaining for some time in the shallow waters and kick around and see if you can float. Investing also requires you to read a lot and test a few of your hypothesis to see if it works or it fails and relearning them and trying to ensure you do not lose all your money at one go.
Then a few runs across the pool on the shallow side to see if you really picked up the basics in swimming. You may sometimes feel you are drowning, but since you are in shallow water, you can get back. Same way in investing, you can start with a few mutual funds and stocks and test the results of your hypothesis and even if you lose money you can still recover.
As you learn swimming and become better, you take more risks by going into the deeper side of the pool. In Investing, it is the riskier shares or assets that you put your money in and the amount of money you put in ( position sizing).
If you have learnt your basics in a swimming pool, as you venture into the river or sea, you will notice that the pool now is not just a stable place, but has turbulence that is up and down. As you swim, you start picking up the up wave and float in the down wave. Investments journey is also like that over a long period of time. There are down periods where you invest slowly but surely in businesses you know will grow once the up periods come. And once the up periods come you will be rewarded substantially, which you may partly en cash and continue the ride or the swim.
