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While many of our favorite pastimes like eating out and going to movies have been impossible during the pandemic, I am grateful that golf courses have remained open in much of the country. Golf has provided a way to recreate and interact with friends while making it easy to maintain social distance. As the markets rollercoaster up and down it’s easy to draw parallels between investing and golf. Both require patience and consistency and it certainly takes time to develop a high level of skill.
Diversification

A well-diversified portfolio has various assets earning the highest return for the least amount of risk. A typical diversified portfolio has a mixture of stocks, fixed income, and commodities. Diversification works because these assets react differently to the same economic event. The same is true in golf. My favorite club is my eight iron. It wouldn’t serve me well if I had a bag full of eight irons. I need fourteen clubs of different lofts to manage a variety of distances I’ll encounter during the round.

Developing a Plan

A plan is critical to a successful investing outcome. You need a goal and a strategy to reach the objective. In golf that is known as “course management.” It refers to a plan of attack for each hole that helps minimize mistakes and maximize opportunities to reach a desired score.

In It for The Long Haul

Great golf requires great patience. You have to be willing spend the time and learn from your mistakes to improve. It also takes time and patience to invest. “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.” Warren Buffett

The Good with the Bad

When you are in the market you win some, you lose some. Hopefully your plan is diversified enough to balance the losses with the wins. When Tiger Woods was at his peak, he won 28% of the events he entered. This means he still lost most of the time. But, he won enough to make his career more than worthwhile.

Work with a Pro

One of the biggest mistakes novice golfers make is not getting lessons early in the process. Without instruction it becomes easy to develop bad habits that are hard to break. Ignoring the fundamentals insures a long and rocky road filled with frustration. Same thing in financial planning. As financial advisors, it’s our job to help you develop a strategy to determine what’s important and adjust things if needed along the way. Remember, that in golf and investing, even when you feel you are at the top of your game, there is still work to do.

For more information about how to tee up a plan to fund your life’s passions, hobbies and long-term dreams, contact Scarlet Oak Financial Services at 800.871.1219 or contact us here.

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This article originally appears in Golf Central Magazine : Volume 21, Issue 2, page 44 on 08/07/20. Golf Central Magazine is The Southeast’s Turf, Travel, Philanthropy, and Lifestyle Magazine. Check out their websiteFacebook, and Twitter.  Golf Central Can be contacted  at (321) 765-7550 or info@golfcentralmag.com.

This material has been prepared for informational purposes and is not intended as tax or accounting advice. Please consult tax or accounting professionals for specific information regarding your individual situation.