The Golfer's Guide to Investing

The Tools • The Conditions • The Strategy

When it comes to golf and investing, there's no shortage of similarities. There are things you can control like the clubs you choose to bring, the balls you use, the shoes you wear, and the courses you play. But many elements are out of your control like the weather, the wind, the cut of the grass, and the trees. Investing is very similar; there are things you can control and things you can't. This is a guide to help you focus on the things you can control.

The Tools

First and foremost, think of your golf bag as your investment portfolio. Your bag contains all the tools you'll need to get you through the many conditions you'll encounter.

You've got your clubs, balls, tees, umbrella, towels, gloves, and a couple of cold beers. In your investment portfolio, you can create a diversified mix of asset classes such as US stocks, non-US stocks, bonds, commodities, ETFs, index funds, and cash to help you weather any storm.

The Conditions

Then there's the course you're playing. Are the fairways long and wide or short and tight? Are there trees, water, sand, or tall grass to contend with? Has it rained recently, or are the greens dry and firm? Before you tee off, it's wise to consider all of these factors. This will help you formulate a game plan for the day and hopefully give you an edge against your competition.

Investing is no different, and there are many questions you can ask to get a sense of the current market conditions. Like has the market recently hit all-time highs or recently crashed? Are interest rates falling or on the rise? Is inflation hot or cold? Is the US Dollar strong or weak relative to other major currencies? Have profits been strong or is the economy in a slump? Is the unemployment rate rising or falling? As an investor, it's wise to consider all of these factors before teeing off on your next investment.

The Strategy

Last but not least, your success will be determined by your strategy and execution. If the first hole is a 370-yard par 4 with a massive sand trap 250 yards out, do you hit a driver off the tee and plan to hit a wedge to the green, or play it safe with a 3-iron and plan to hit a 7-iron to the hole?

Next, you're on a 500-yard par 5. Do you attack the green in two and play for a birdie? Or do you take the more conservative approach and lay up, ensuring you'll have better odds of staying in the fairway and shooting par? Again, the thought process behind creating an investment strategy is very similar.

Think of higher-risk investments like high-risk golf shots. Think of lower-risk investments like short-term government bonds as safer iron shots. For success over the long term, you'll need the right combination of both. And always, always be sure you have your umbrella ready for that unexpected thundershower, just as you should always have some cash stashed away in your emergency fund.

With Masters Week upon us, it is an opportune time to start strategizing about your golf game and your investments for the upcoming season. Having the right clubs in your bag, the right assets in your portfolio, and knowing how and when to use them puts the odds in your favor of having a successful year ahead.

Thanks for reading, have a great rest of your week!

Do you have the right mix of assets in your investment portfolio? Do you need help organizing your finances and creating a financial plan, reviewing your 401K, or simply want a second opinion to make sure you’re on the right track for retirement and beyond, please reach out to [email protected]!