Ace Your Investments

Four lessons from the pros to impact your portfolio.

If you sampled the average conversation on golf courses around the country, you’re likely to hear bold predictions on the break of the green and the break of the market. At Taylor Hoffman, we are always seeking new ways to help our clients understand our approach to investing. While we don’t recommend going “all-in” on that hot stock tip you got on the 7th tee, there is much to be learned from the pros and how it applies to your portfolio.

Here are four lessons to take from the professionals and how employing these habits can impact your financial plan:

Mental toughness is a must.

When emotion is high, logic is low. In golf as well as investing, it pays to be even-keeled. Brooks Koepka recently moved into golf’s #1 world ranking, and aside from his athletic talent, he’s considered by many to be the most mentally tough golfer on tour. His lack of emotion is even the subject of joke threads on Reddit.

Jokes aside, if emotions guide your portfolio, there’s a good chance you’ll be selling low and buying high. As we all know, that’s not a winning formula.

Keep the end goal in mind.

There are endless ways to play a hole of golf. In the same way, there are countless ways to reach your financial objectives. Your gameplan can’t stay static; it must remain flexible. You might have intended to have a clear approach shot, but sometimes your tee shot doesn’t make that possible. How you respond in those moments will influence your final score.

Your goals change throughout your lifetime, and so should your approach to investing. It’s important to periodically ask yourself, “Is my financial plan still serving my current and future objectives?”

Have a bailout position.

As the old adage goes, “Don’t put all your eggs in one basket.” While we all would love to have pinpoint accuracy on the course and pick only winners in the market, sometimes things don’t work out that way. Professional golfers always seek to have a bailout position in case they miss their intended target. Landing in that spot might not be the goal, but it’s better than ending up in the water.

The same is true of investing. Diversity in your portfolio serves to mitigate your risk in case the market doesn’t do exactly what you want it to do.

Hire a trusted coach.

Even the best golfers in the world still seek outside advice. From caddies to swing coaches, every great player surrounds themselves with experts to guide their decision making. Tiger Wood’s close relationship with his current caddie Joe LaCava is well documented, and Phil Mickelson credits his brother and caddie, Tim, with helping him post a 69 in the first round of this year’s PGA Championship.  

Like golfers, even the most seasoned investors require outside perspectives from time to time. Finding the right expert advice can make all the difference. Be wary, however, of people recommending quick or easy solutions. Success in the market requires discipline, expertise, and patience.

If you’re anything like us, you’ll be tuning in for this weekend’s US Open Championship at Pebble Beach. Be sure to observe the best in the world employ these habits and ask yourself, “Is my financial plan still serving my current and future objectives?”

Are you looking to change your approach? Let’s start a conversation today.

Disclosures:

Taylor Hoffman is an SEC registered investment adviser with its principal place of business in the State of Virginia. Any references to the terms “registered investment adviser” or “registered,” do not imply that Taylor Hoffman or any person associated with Taylor Hoffman have achieved a certain level of skill or training. Taylor Hoffman may only transact business in those states in which it is registered /notice filed, or qualifies for an exemption or exclusion from registration /notice filing requirements. For information pertaining to the registration status of Taylor Hoffman or for additional information about Taylor Hoffman, including fees and services, please visit www.adviserinfo.sec.gov.

The information contained herein is provided for informational purposes, represents only a summary of the topics discussed, and should not be construed as the provision of personalized investment advice or an offer to sell or the solicitation of any offer to buy any securities. The contents should also not be construed as tax or legal advice. Rather, the contents including, without limitation, any forecasts and projections, simply reflect the opinions and views of the author. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change without notice. There is no guarantee that the views and opinions expressed herein will come to pass.

This document contains information derived from third party sources. Although we believe these third party sources to be reliable, Taylor Hoffman makes no representations as to the accuracy or completeness of any information derived from such third-party sources and takes no responsibility therefore.