Are You Ready to Assume Risk?

Posted: Apr 24, 2012 12:01 AM

I was at the wedding of a friend this weekend in New Orleans. At the ceremony, I found what the minister had to say very interesting in some respects. He talked briefly about risk. I have never heard anyone talk about risk at a wedding. What was doubly interesting is that there were a lot of traders in the audience at this wedding, since the groom has been an independent trader since he graduated from Tulane.

It was a great time and if you have never been a part of a 2nd line, you are missing something. The New Orleans police escorted across Canal and into the French Quarter for a parade.

It hit me, while we think we assume risk every day when we trade markets, maybe the riskiest thing you can ever do is get married. Supposedly, the odds aren’t good to have a long marriage. Although, I am suspect on the statistics that are often quoted. I haven’t delved into them, but I’d like to see how they are quantified. I don’t believe 50% of all marriages end in divorce.

The minister asked the bride and groom if they were willing to accept the “risk” of marriage. It’s a good way to put it. When you get married, you are giving your life away to another person. That person pledges to take care of you, in sickness and in health. That person will potentially make life or death decisions over your future if something dastardly were to happen.

A bad marriage can ruin your life. It will make you unhappy. It will affect your trading. I know a fair amount of traders that quit trading while they were getting divorces because it messed with their head so much. Traders are really pragmatic, so many of them try to minimize their legal costs. They know a bad trade when they see one, so they try to minimize the damage.

I was married really young, before I started trading. I had just turned 25. At the wedding, we howled with laughter with other trading couples over the financial highs and lows of trading. My wife remarked to me, “I love being around traders.”. She has endured the uncertainty of being a traders wife. The stories that ensue over surviving tough times is some of the funniest.

If you are in the business long enough and take enough risk, you will eventually have a few horror stories to tell. Many wives can’t take that. I like to say that one day my wife is shopping at Hermes, and the next she might be at Walmart. That’s the way the business goes. It’s risky.

However, marriage may be the greatest risk of all. Think about that the next time you add on to a loser, or go on a date.