SCOTT REED: Love lessons apply in financial investing

My sister-in-law is getting married this weekend. The wedding should be a lovely affair. Outdoors in the Northwest in October. I like the guy she’s marrying, not that it would matter that much. They didn’t consult me before they got engaged, nevertheless, it is a big bonus for me that I like him.
My in-laws tend to spend a lot of time in the mountains together and it helps to like your tent mates, as well as love them.
My sister-in-law asked me to speak at the wedding about marriage. That is a bit scary as I am only 18 years into my marriage and am under no illusions that I have gotten it right yet.
Marriage is a struggle, but that’s not a bad thing. Successes in endeavors within which you struggle are some of the greatest successes. The harder it is, the more you appreciate the outcome.
So I have been thinking about what I want to say to this young couple who has decided to spend the rest of their life together. And of course, I have also been thinking about how that might fit into a financial column. This is what I have come up with.
There are four different words in the Latin language for love: agape, eros, philia and storge.
Agape love is the love generally used to describe the love of God for us. Not just Christians, but other religions as well. It is a deep or true love.
Storge love is a love of natural affection such as between a mother and child.
The two words I want to discuss are eros and philia. Eros is a passionate love. It is emotional. It is about beauty, attraction and all those things that make you do stupid things “in the name of love.” It is the love that gets you to the altar and what you hope your life will be like forever.
The problem with eros love is that it is unsustainable over long periods of time. It comes and goes as easily as your emotions come and go. And if you have nothing but eros to hold your marriage together, it is very difficult to make it last.
Philia love means friendship. It includes loyalty, family and community. It requires virtue, equality and familiarity. It is the love that holds your relationship together as the eros love ebbs and flows. It is not the most fun part of a marriage, but it is the foundation of a marriage.
Those that understand the importance of a love that is always there and never lets you down are usually the ones that look back over the years and realize how good life has been.
Philia is the offensive line of a relationship. Rarely does the offensive line get the credit that they deserve, but without them the quarterback and the receivers will never make Sports Center.
Investing is really no different. When you go to a party or a civic event and the discussion turns to investments, rarely do you hear someone talk about a really good 10-year municipal bond. Or hear about a stock with a good, solid dividend and slow consistent growth.
People want to talk about what has stirred their emotions. The stock that doubled in the last year or the high-yield bond that is currently paying 12 percent.
But if you want to be a successful investor, you have to have a solid base. You have to have investments that are going to be there for you day in and day out. If you don’t have that base, you can’t afford to go out and try all the fancy stuff you hear everyone talking about.
It is easy to see why so many marriages don’t last. They are based on the feeling you get when you are in eros and there is little philia to fall back on.
I couldn’t think of a better way to understand why so many portfolios fail as well. Too much eros and not enough philia. I believe in a healthy combination of both. Maybe it will help me get through the next 18 years … with my marriage and my portfolio.

Scott Reed, CIMA, AIFA, is CEO of Hardy Reed Capital Advisors in Tupelo.


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