Sorry to sound so unromantic on St Valentine’s Day, but conducting intimate relationships is so like managing your finances.  Just look at it.


When you love somebody, you make an emotional investment in your relationship.  Then when you get married, set up home together, you buy more shares in your future. As time goes on,  the confidence you have in your investment yields substantial dividends in terms of affection, children, home improvements, health and happiness.


Your relationship is not the only investment you make.  There is your job, your interests, your status in the community, but these investments impinge on and are affected by the family fortunes.      


Unfortunately, only a minor proportion of the emotional investments we make, work out. A lot depends on your attitude to risk.   


Falling in love; putting all your trust in one investment that looks attractive exposes you to enormous risk.  It may collapse and you could well end up depleted of all meaningful resources.   


The cautious investor therefore tends to spread their resources across a variety of hedge funds, building their social capital until they have sufficient confidence to make the one key investment. 


But there are some who are so nervous, they never take a risk on love.  Instead, their ever so safe investment offers such a low yield that they may ultimately question its value and be tempted to have a little flutter elsewhere.  


Beware!  Sequestering funds away from your cautious investment and placing it into something more exciting, exposes you to risk.  The new bond  may well provide spectacular returns for a few years and seduce you into withdrawing more of more of your core funds.  But when the collapse comes, as it so often does, there may be too little confidence and meaning left in the core investment to sustain it.  This tends to be the trajectory of emotional affairs.   


A relationship is about two people.  If one of them withdraws emotional capital and places it elsewhere, then the other will be tempted to invest more of their depleted resources to shore up the fund, but this inevitably results in negative equity.  A wiser strategy is to withdraw the acrimoney quickly and manage the depression so that resources can be reinvested safely in individual futures.  One word of advice: don’t be too quick to consider a flirtation with the market.  Consult your emotional manager.