It’s spring here in Florida, and the golfers are out in force. Golfers tell you they love the challenge, being outdoors, and the relaxed pace golf offers. While golf and investing might seem disparate, they share many similarities. If you can improve at one, you can likely improve at the other.
Off to explore the ten ways that golf improves your investment return:
- It takes time to become skilled. Becoming a good golfer requires a lot of effort and time. So does becoming a skilled investor.
- Both require expert instruction to reach your potential. Even the best golfers have a coach. You might not hire a coach for your investments, but you can hit the bell icon and subscribe here, purchase books and access other sources of information, and get the coaching you need.
- It is easy for a great game to go bad quickly. One shot into the water or out of bounds can ruin the perfect game. One clunker investment might not destroy your portfolio…if you’re diversified, but it can come close if you don’t handle the mistake quickly and adequately.
- It’s essential to control your thoughts. Emotions can force you to make poor decisions. Going for the long drive to show off versus the two-stroke gives me a layup shot that will screw up a golf game. Because of emotion, nearly all investors have made at least one terrible financial decision.
- Patience pays off. Rushed decisions are often poor decisions. Take the time necessary to make a good decision. Rushing a golf shot rarely turns out well. Jumping to conclusions about an investment leads to similar results.
- Sophisticated tools are not the answer. Golf technology improves by leaps and bounds every year. Courses that held professional tournaments in the past are frequently too short now to accommodate the better clubs and balls. However, the average player doesn’t seem to improve his score with this advanced technology. Investing theories, tools, and software also become more sophisticated each year. You can spend a fortune on subscriptions, analysis tools, and gurus and never make the ROI in time or money to justify it.
- One great shot doesn’t make you great. One great shot doesn’t mean you’re suddenly a great golfer. One horrible game doesn’t suddenly mean that you’re a horrible golfer. Any of us who golf know that those occasional amazing shots keep us coming back – but the horrible shots bum you out. Just because a stock has gone up 10-fold in the last several years doesn’t mean it can’t go even higher – or completely crater! Doing your homework and performance over the long haul is critical.
- It’s all about risk management. The best golfers are great at hitting the ball, staying calm, and managing risk on the course. It’s not always easy to decide whether to lay up or to go for the flag. Risk assessment and risk management are significant parts of investing, too.
- Casual advice is frequently lousy advice. Every golfer has had a friend, stranger, or playing companion provide advice on his swing. The simple investing advice is just about as helpful. If you’re going to take advice, be sure to take it from a real expert!
- Know where you want to go. If you don’t know where you’re going, how will you end up in a good place? Each shot on the golf course requires a target. This target is chosen based on the obstacles and the hole’s location. Your investing must have a target as well. What are your investing goals?
Golf and investing might not seem to have much in common, but they share many similarities. The ideas that allow a golfer to become great will allow an investor to do the same. Planning, patience, and expert instruction are great ways to improve your odds of success.
Want to improve your finance game as well as your golf game? Time to hit the links!
Want to think about how golf can improve your life – check out a couple of classic books on golf and the philosophy of life:
- Golf in the Kingdom by Michael Murphy. Murphy offers a mystical view of golf and the perspective that golf can give to life.
- Golf for Enlightenment by Deepak Chopra. Chopra translates his passion for the game into lessons learned for life and self-development.