January-February 2010 | THE SWING OR THE CLUBS

Matt Repass, CRFA, RFC, is an Investment Advisor, Registered Financial Consultant and Certified Retirement Financial Advisor with PKS Investment Advisors LLC.
THE SWING OR THE CLUBS

MONEY MATTERS

THE SWING OR THE CLUBS

Consider combining your investment strategies with the fundamentals of one of the greatest swings in the history of golf

Written By: | Photographer: Stephen Cherry

The Eastern Shore is a golf-rich area, and although some readers of Coastal Style may not actually play the game, we know friends and family who enjoy playing it year round, 
regardless of the weather. Why would an article discussing Money Matters open by discussing golf? Allow me to explain.
  
In my 24 years as an investment advisor, I have found the use of analogies to be extremely helpful in translating complex financial jargon into simple and understandable 
information for my clients. I believe the game of golf provides an excellent analogy for those concerned about wise money management.
 
Golfer or not, we all know Jack Nicklaus, the most accomplished golfer of all time. It’s also fair to say that we all know of the prestigious Masters golf tournament held each April in Georgia. Winners of the Masters are awarded a substantial check, a distinguished green blazer, and most significantly, lifelong recognition worldwide as a Master’s champion, placing them shoulder to shoulder with the greats of the game.
 
Now imagine you are given the opportunity to play in the Masters tournament for all the money and prestige. To greatly enhance your chance for winning, you are given a choice: play the event using “your swing” and Jack Nicklaus’ clubs or play using “Jack’s swing” and your clubs. Which would you choose? Since few of us possess the finely honed swing of Nicklaus, the choice is rather obvious – play using his swing and your clubs.
 
Just as golf magazines will roll into the new year touting the “Hot New Items” for 2010, financial magazines will be luring us with reports of last year’s “Hot Investments / Funds,” both attempting to entice our hard earned money in their direction. In the golf magazines, the message is, these clubs are better than those clubs and from the financial side our funds are better than theirs or our “guru” is a better than theirs. With our obvious choice of playing the Masters using Jack’s swing and your clubs to give you the best chance of winning, my analogy is this; The swing represents your financial plan and the clubs represent the products you invest in to carry out your plan. Due to the massive marketing budgets of both the golf companies and Wall Street, the problem we see in both financial planning and golf is that we tend to focus our attention to the clubs or products, and not the swing or the plan. 
 
Wall Street also blinds many investors with shiny new clubs (products) being offered and entices them into throwing their hard earned money into products that don’t complement their financial plan. This is the type of approach that I refer to as club-focused planning. These products sound good but most often bring in added risk to a portfolio which, when times get tough, as they did in markets over the past few years, cause us to act carelessly – often on emotion – resulting in a deviation from your goal.  
 
Consider instead a financial plan that is swing-focused. Constructing a diverse financial plan – satisfying your ability, need and willingness to take risk – can help you to achieve the financial goals you have set for you and your family. Focus on the plan and meet with your advisor (just as the tour professional meets with his instructor) to hone and 
refine your plan periodically. This way, you can build a swing that will hold up through even the toughest times, keeping  on track to your ultimate goals. You can then venture out into the investment world to select the clubs that are suited for your game.
 
I began the year encouraging Coastal Style readers to ride out the storm, and we have seen some significant recovery in the markets. During these tough times, some of my most gratifying moments have come when clients who adhered to the swing-focused plan expressed relief for doing so. For those beginning the New Year resolving to get a better handle on finances or retirement planning, consider making the investment of your time discussing your options with a qualified professional. They can help you hone your swing before you throw your money at the blinding glare of those shiny new clubs.

 
EDITOR'S NOTEMatt Repass, CRFA, RFC, is an Investment Advisor, Registered Financial Consultant and Certified Retirement Financial Advisor with PKS Investment Advisors LLC, a fee-based Registered Investment Advisory firm located in Salisbury and Ocean City. Matt and his wife, Sharon, reside in West Ocean City and enjoy golf, cycling and volunteering in the community.       
 
 
PKS Investment Advisors LLC
410-546-5600
 
 
 


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