I heard a saying the other day: You can't stop the waves, but you can learn to surf.

I am fortunate to be visiting Honolulu for a couple of weeks. As I sit here on the lanai of my house looking at the beautiful Hawaiian waters off Diamond Head, I believe that saying is more applicable today then perhaps ever before. Today the economic waves just keep coming, one after the other. How people respond to these ever-changing financial waves is no different than how the beachgoers in front of me respond to the ocean waves.

I see three different behaviors:

1. The tourists who have never swum in an ocean before. They see the waves, get excited and, without understanding the force of the waves, run straight into the water--and get pummeled. After being pushed to the sandy bottom by the power of the wave and tossed around like a beach ball, they pop up to the surface, breathing heavily, coughing up water with a look on their face of, "What the heck was that?"

They drag their bodies to the safety of the beach, lie down and say, "I'm not doing that again!"

How many people, with no knowledge, got pummeled in the financial markets because they didn't know what they were getting into? And because of the losses they took now say, "I'll never do that again."


2. Those who have learned from experience that the waves can be enjoyed if you're careful, don't take risks and stay close to shore. They don't want to push themselves too hard or take the risk of getting pummeled the way the novice tourists do. They play it safe and are content to enjoy the waves, within the limits they've set for themselves.
   
   These people remind me of "investors" who do what their financial advisors advise, with little education of their own. They do what everyone else is doing; 401(k)s, mutual funds and CDs.
   
   Unfortunately, many of these people are now waking up to the fact that the "safe and secure" road can become the risky and insecure. They are confused and asking, "Should I get back in the water or remain on the beach?"
   
   
3. And then there are the surfers. They embrace the waves. They see the waves as a challenge--not so much to conquer, but to use the power and the changes of the waves to get the most out of the experience.
   

Surfer Girl
On a trip to Hawaii several years ago, we went surfing in Waikiki. Robert had bought a new surfboard, so I rented one of those long, floatable surfboards for $10 per hour, and we both paddled out to the waves.

I struggled for about an hour without coming close to catching any waves. Then I looked to my left and noticed an older surf instructor working with three kids, about 10 years old. I paddled closer to listen. I took in all he was teaching them.

Then he glanced over at me. He said, "You wanna surf today?" I nodded. "OK," he said, "just do what I say. Turn your board around to face the shore. When I say paddle, paddle as hard as you can, don't stop, and when I yell stand up, you stand up."

When the wave came, I paddled as hard as I could, but the wave passed me by. He just looked at me.

"When I say paddle, I mean paddle. You quit on the wave. You sure you want to do this?" he asked gruffly. "Yes," I replied. "Then do what I say and don't quit."

"Get in position," he commanded. "Paddle!" he shouted. "Paddle!" I paddled my heart out, and then my board was on the wave and the wave was pushing my board. I was so excited I almost forgot the next step until I heard the old guy yelling, "Stand up! Stand up now!" I got to my knees and then stood up. "Wow!" I thought, "I'm standing up!" As soon as I had that thought, I fell right off. But I knew what it felt like to actually ride a wave. I couldn't wait to paddle out for my next wave.

I stayed out in the water for the next two hours and, by the end, I was actually standing up and riding waves into shore. I loved it.

The Moral of the Story
With no instruction, I was frustrated and confused by the waves. The waves just kept coming . . . and I didn't know what to do. The waves were winning. All it took was a little bit of learning to understand how to work with the waves, and not just ride the waves but actually enjoy the experience.

If you pay attention to the changing tides and learn how to navigate them, then instead of fearing the waves--and fearing the changes within the current economy--you can actually use them to your advantage and get the most out of your ride.

So in these economic times you cannot stop the waves--but you can learn to surf.