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What does Hiking Mt. Washington and Investing Have in Common? August 12, 2008

Posted by shaferfinancial in Uncategorized.

Mt. Washington in New Hampshire is a very interesting mountain.  It has its own micro-weather pattern!  Its the highest mountain in the northeast US at 6288 Feet.  Not impressive when it comes to mountains, but what is impressive is the weather.  It has some of the most variable and foreboding weather in the world.  About every year some unprepared people start the hike from the bottom in good weather, get caught in the change, and die on the mountain.  The highest recorded wind speed at 233 MPH was recorded there.  Routine -40 F temperatures in the winter and summer temperatures that can well below freezing.  It averages 100 days a year with hurricane force winds.  The hiking is rocky and at points challenging.

Why would anyone hike or drive up?  The views from the top are incredible, the hiking challenging, and its reputation insidious. Sounds like investing doesn’t it!  Successful investing gives you a great view from the top, but is challenging and if fraught with risk for the amateurs.

The key is knowledge, proper equipment and managing risk.  Why do most people avoid the top of the investment mountain?  Because they don’t take the time to gain the knowledge, use the proper instruments and learn to manage risk, both emotionally and formally.

Both hiking and investing isn’t really scary if you know what you are doing and are prepared for the changes as they come at you.  Just as hiking Mt. Washington isn’t really scary if you are knowledgeable about the mountain and prepared for rapid changes.  Here is a video of my 6 year old on a recent family hike on Mt. Washington.  Temperature at the peak 45 degrees, wind speed 20-25 MPH.

Want to get to the top of the financial world?  You need to transverse the investment world, get in the game, learn to manage risk, make good decisions, and be prepared for rapid change.



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