3 Ways That Improv Comedy Can Make You a Better Investor

I don't just write about money matters. I also teach and perform improvisational comedy. It started out as a fun escape, an entertaining way to improve my public speaking skills and keep my mind sharp. It evolved into a passion, and now I'm one of the five owners of Just The Funny, the largest dedicated improv theater in Miami.

Improv isn't just for folks hoping to get on "Saturday Night Live." I've taught lawyers, college students and even fellow financial writers performance skills that can extend beyond the scenes crafted on the fly based on audience suggestions. Improv comedy has plenty of real-life applications -- and that also includes making smart investors even smarter.

Let's go over a few of the improv tenets that can also apply to mastering the market.

1. Yes, and...

These are the two words that folks typically associate with a two-person improv scene. You don't deny your fellow improviser. Whatever is said on stage is immediately true. If he says that you're an army private in Peru with a case of the munchies, that's who you are. If you kick off a scene by telling your partner to beware of falling rocks and you call her your mother, then you're in an avalanche with your mom.

%VIRTUAL-WSSCourseInline-1003%The key at that point is to take your scene initiation and build on it. If you're a militant in Peru and you're hungry, you might start looking for a place to eat or start rummaging through your pockets for that protein bar. Ideally, you would also flesh out your partner's character, returning the favor.

It's easy to see how "Yes, and" can play a part in assessing any investing situation. The market's going to throw some unexpected things at you. A company whose stock you own can lower its financial guidance. Your mutual fund's manager can quit. It's all true; build on it. Do you follow your fund manager to her next post? Do you stick it out because the co-manager's still there? Do you cash out and start your own fund? As long as you don't deny the reality offered, there is no wrong answer. There are no mistakes in improv.

2. Bring a Brick, Not a Cathedral

Improvisers will be quick to point out that they don't like to perform with people who hog scenes. You don't want to share the stage with someone who initiates a scene by offering a dozen nuggets of information before you get a say. The two of you are supposed to build the scene together. You bring a brick and together you build the cathedral.

That's another meaty morsel that can serve you well as an investor. Don't try to go it alone. Don't just rely on your own perspective. Fish out other vantage points, even if they differ from yours. Spend time on online forums. Read what different financial writers have to say about a stock that you own or are considering owning. Respect opposing views, and actively seek them out so you don't fool yourself with confirmation bias. You can't assume that you know everything; you don't. Nobody knows everything.

3. Stay in the Moment

Improvisers often remind one another to be present. "Stay in the moment," one might advise before going on stage. Don't think too far ahead in a scene, since nothing is scripted. Don't dwell in the past, because that's been merely the buildup to where a scene is in real time. Let go. React to what's happening in the here and now.

This also applies to investing. You can't fall in love with a stock based on what it did in the past. Microsoft (MSFT) did some pretty amazing things in taking PCs to the masses, but is Windows as relevant now in an era where the vast majority of smartphones and tablets run Android or iOS? McDonald's (MCD) revolutionized the restaurant industry, but after several quarters of negative comps, it's now more of a laggard than a leader. Always value the current situation more than historical tendencies. Wall Street's short-term memory makes the here and now more critical than anything else.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned, and he naturally also owns a piece of Just The Funny. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. Check out The Motley Fool's one great stock to buy for 2015 and beyond.