Baseball and Investments - They Have More In Common Than You Might Think!

July 3rd, 2008 at 09:37am Theresa Harzelak

  Theresa A. Harzelak, CFP^® 

With two young active sons, I spend a lot of time at the baseball field.  The truth is I love the game as much as they do. A deeper truth–I find that the game of baseball and the strategies to winning the game offer us many life lessons 

What does a winning baseball strategy have to do with investments? Well, in the last 20 years, I have seen two kinds of investment managers—those that swing for the fences at every at bat looking for the home run and those that patiently, methodically put a man on every base, take the home runs when they happen, but strategically look for ways to win the game. 

At one of my son’s practices, every boy that got up to bat was swinging for the fences.  They hit a lot of fly balls and the outfielders were there to catch all of them.  Every boy wanted to hit a home run.  

I remember coach, Jeff telling them, “Boys, unless that ball goes over the fence, all you have is a loooooooooooooooooooong OUT!”   

Too many investment managers go for only those home runs.  They drift from their style, change their investment philosophy or take on too much risk to show their clients that “home run” performance. The problem with this investment philosophy is that these managers strike out more often than they hit the ball. Even more important, it is the client that loses the game.  

My investment philosophy is to put a winning strategy in place.  If you consistently hit singles and doubles, you’ll score enough points to win the game.  I’ll take the home runs, but I’d much rather have the bases loaded when I hit one. That way, my clients will be the winners at the end of the game and it will have been a much more enjoyable game to watch. 

Enjoy your summer and maybe, go see a terrific baseball game.

Entry Filed under: Investments