Golf Your Way to Financial Success

Oct 31, 2011

Playing golf in 40 degree weather is not as much fun as it may seem, but a few weekends ago  it taught me a valuable lesson. Golf is similar to the stock market in many ways; hit a few great shots in a row and we feel confident.  In contrast, miss a few shots and we second guess everything we do. The more frustration the game brings us, the more adjustments we want to make to the mechanics of our swing. The stock market is no different.  When the market is up, confidence soars and everyone is happy.  However, we are quick to press the panic button when times are tough. Instead of staying on course with our financial plans, our emotions get the best of us. We look for swift corrections and adjustments to our golf swing and our portfolios, which can sometimes do more harm than good in the long run. Investing is about buying low and selling high, but when our emotions take control, selling at any level seems like the rational decision. So, the answer is a long-term plan, right?

As Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” I know the stock market has taken its fair share of swings over the past couple years, and buying low after getting punched in the mouth never seems like a rationale decision; however, it could be your best. What is the purpose of a plan if we will not stick with it during difficult times?  Without a plan we would live our lives off pure emotion. Emotion forces short-term reactive decisions and dismiss long-term strategies. Without emotion, everyone would be a great golfer and investor.

We don’t change our entire golf swing every time we hit a bad shot. Instead, we stay calm, take a few more practice swings and trust our mechanics. We stick to our plan, and the plan does not change because of one rough day on the course. The results we are looking for will not come from swinging harder, but from keeping our head down, staying focused and working hard every day to save for tomorrow.

Sometimes all our plan needs is a deep breath and someone reminding us to keep our eye on the ball.

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