A local team played a tough football game last week that was ultimately decided in the final two seconds as two players pushed against each other, one foot from the goal line. Because of that single foot, and those two players, one team walked away cheering themselves the winners. The other team hung their heads in defeat. That one play resulted in hundreds of thousands of fans spending the weekend either in celebration or discouragement. Silly as it may sound, had that single defensive player lost his footing, the outcome for the teams and their fans would have completely changed. In the end, one team was nationally praised for its courageous win, while the other was dropped from national rankings, all over two players fighting for two seconds, over one foot.
It is said that the doors of history turn on very small hinges. That is certainly true of the outcome of many football games. A three hour competition is often decided on a single play, penalty, or mistake. In many ways, coming off the winner comes down to luck on any given day. So what separates the great teams from the not so great? All athletes know that sports involves its share of luck, but they also know that those who are the most prepared, are lucky more often. Great teams will not win all their games, but over time they will win most of them.
Investing success also turns on small hinges. The outcome of any single investment is never assured, and investors, like athletes, understand that losses happen. But investors also understand that those hinges will turn their way more often if you are prepared. Athletes prepare for a game by focusing on fundamentals. Here are just a couple of the fundamentals that can help an investor to prepare:
1 – Invest consistently every single paycheck of your life, no matter how small.
2 – Invest in what you know, or what your advisor knows. Avoid that which is not easily
3 – Don’t try to get a higher return than is reasonable. If you want to gamble, go to Vegas. 4 – Formulate a long term plan for success and update it regularly.
5 – Understand that all investments have their place, but not all have their place in
your portfolio. What is good for your neighbor may not be good for you.
6– Admit your mistakes and move on. Don’t try to save a bad investment by buying more
7 – Avoid investing decisions based on dramatic current events, like elections, terrorist
attacks, weather disasters and scandals. The passage of times brings things into
8 – Be highly suspicious of investment pitches that are emotionally based.
9 –Always live on less than you make.
And finally, don’t take it all too seriously. It really is just a game, or just money. If you stick with the fundamentals, the small hinges that turn your life will more often than not, turn in your favor.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
This communication is strictly intended for individuals residing in the states of AZ,CA,CO,DC,FL,HI,ID,IL,KS,KY,MA,MI,MN,MO,MT,NE,NM,NV,OH,OR,SD,TX,UT,VA,WA,WY. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.