Here come the similarities between virtues of Investment and Chess:
- Think long term. Just ignore the latest experts’ advices. In investment, long term normally means years (I prefer decades), pay attention to what you may gain at the end, not what you may gain or loss in short term; In chess, long term means the final result of the game. A seemly tactic disadvantage or temporary material disadvantage may not be disadvantage at all. Never give up, fight on.
- Be value oriented, but not risk/opportunity oriented. In investment, index mutual funds are often preferred than other funds because the low fees involved. Index funds just mimic the market and are boring for those who like to time the market, other funds could be much interesting (much risks and high fees involved) and may have high yields at times. But over the long run, index funds will outperform the majority of other funds. The purpose of investment is neither to maximize profits by all means not to find entertainment within all the time; In chess, you may choose a beautiful positional sacrifice sometimes, but you should be practical, avoid unnecessary risks, chess is not a beauty contest.
- The important thing is not when to start to take risk, but is when to stop it. In investment, sometimes you can earn a lot of money from one of your funds, for example, some developing country sect funds yield much better than domestic sect funds at one time. You put all stakes into this basket in the hope to get the maximum return; however, you could lose all your money overnight. Do not take this risky route for too long, do the opposite of your impulse, think an exit strategy right away; In chess, do not always think to attack, look around to see if you own king is in danger. You may need to change you strategy in order to clean your own back yard.
- You control your own destination, not by controlling others, but by controlling yourself. In investment, controlling others could means controlling the financial market by wishful thinking or by keeping changing your investment approaches. Do not waste time to chase a new, fancy investment method, even you have those desires now and than. For example, the “experts” were yelling loudly to convince you to do adopt a brand new investment combination based on current stock market, you do not have to believe the words of those “experts”. Self-discipline and self-control is much important than trying to control others. Be diligently in saving and invest regularly; In chess, do not move on impulses, do not move on wishes of your opponent’s next move, remind yourself all the time: self-discipline and self-control.
- Slow Down and let time do the magic. It is valid for both investment and classic chess (not speed chess, of course).
- Finally, have a thankful and gracious mind. In investment, when you earn money, be thankful of good luck; when you lose money, good luck in future; In chess, when you win games, good for you; when you lose games, you will be better by learning from the losses.