If you’re a golfer, you know there are certain techniques you need to master to “go low,” from driving the ball, to hitting fairway woods and irons, to putting. You also know that on days when you’re not executing properly, you don’t score well and the game can be frustrating. That’s a lot like investing; in fact, the two activities have a great deal in common.
The game plan
Golf is a long process; tournament golf, even longer. To play well, that is, to score well, you have to have a good game plan and stick to it throughout all 18 holes. You don’t just hit the ball randomly; you have a purpose behind every shot. And you have to consider the whole picture before you hit—your lie, the wind and weather, club selection, your stance, your mental picture of where you want to hit the ball—and make the appropriate adjustments.
Investing requires a game plan as well. It’s your financial plan and it has to be comprehensive, taking in consideration your financial conditions, your challenges, your objectives. You don’t want to invest randomly, like buying the latest “hot” stock you just heard about. You need to determine your best path to achieving your financial goals and know how will you get there. And to be successful you will remain focused on your plan for the long term, making adjustments along the way to accommodate changes in your life, finances, and goals.
According to the rules of golf, you can carry up to 14 clubs in your bag. To play well, you need to be able to use each of those clubs effectively. You won’t hit a great shot every time, so you have to choose wisely and plan carefully to reduce your risk and improve your score.
Of course diversification is key to successful investing. No one can predict with any precision what will happen in the markets on any given day much less any given year. At HBKS we manage your portfolio by owning an array of investments to reduce risk. We diversify because no one can predict the markets. You want to invest for growth but you also want to protect your wealth.
A successful financial plan requires a great deal of patience and dedication. You have to stay disciplined. In golf, the same applies. In a four-hour round, you are playing, that is actually swinging and hitting the ball, for about 2 minutes and 30 seconds. The rest of the time is spent thinking. During this mental period, the best players have a process, a plan they commit to over and over. The golfers who fail, that is, play poorly, let time get to them. They fill their time on the course complaining, trying things they haven’t practiced and that aren’t part of their plan, instead of staying committed to their plan.
Successful investors focus on long-term goals rather than daily returns. We know multiple shots will find the rough or maybe even a water hazard. It is how you respond that determines whether or not you get your game back. Your financial plan takes into consideration the swings of the markets, gains and corrections, times of growth and recessionary periods. We know that markets are often volatile; they go up and down throughout the year. A depressed market is an opportunity to buy quality stocks at lower prices. What we don’t want is to sell or give up just because we’ve landed in a hazard.
Staying disciplined and invested over the long haul pays off. The S&P 500 has averaged a 10 percent gain, assuming dividends are reinvested, over the last 100 years. An investment of $10,000 in 1940 would be valued at more than $5 million today. The mantra is true: Time in the market is more important than timing the market.
Players, even the best players, work with a professional. The professional is trained to pick up on areas in your swing that can be improved to lower your score. Part of the reason the top 1 percent of golfers are as good as they are is because they work consistently with their advisor.
The same is true in investing. Your HBKS financial advisor acts as your coach. We build your financial plan and actively monitor it. We analyze your investments, analyze how those investments are allocated, make tactical rebalances along the way, review your life and disability insurance to ensure proper protection for you and your wealth, and consult with our CPAs to ensure tax-efficient investing.
Like golf, successful investing involves discipline, diversification, commitment to your plan, and the support and guidance of a knowledgeable professional. We can help get you improve your investing score and avoid the hazards along the way. For more information or to schedule a consultation, call us at 1-800-823-0617 or email me at firstname.lastname@example.org.
The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.
Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.
The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.
HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.