Don’t Give Up
As I write this article, the Tennessee Volunteer football team has won their first five games of the 2016 season. They have stumbled into huge half-time deficits, in most of those games, which they had to overcome. In the matchup with the Georgia Bulldogs they trailed 31 to 28 with four seconds remaining, and then completed an unlikely, improbable, but thrilling 43 yard “Hail Mary” pass to win the contest. During each battle, I am sure that many of us watching either in person or on television concluded that all was lost sometime before the clock ran out and left the stadium or turned off the television. If so, we missed several brilliant displays of how preparation, practice, and perseverance resulted in victory.
As sports fans, we generally only see the gameday performance of our teams. We are mostly oblivious to the massive amount of time, energy, and effort that precedes the game. Also, we are not involved in the huge number of decisions that are made before and during each play. Not only do coaches and players have to make and execute multiple decisions, but in order to succeed they must have considered those actions prior to the game and practiced them. In an emotional and physical competition they must rely on their preparation and experience to think and perform at the highest levels while under extreme stress.
In listening to the comments of the coaches and players after the amazing victory over Georgia, I was impressed by how prepared the team was for the situation they faced in the last 10 seconds. They had practiced for a last second kickoff return throughout the pre-season. They had never used this return formation before but were able to execute the play to near perfection and advance the ball over mid-field with 4 seconds left on the clock. The final heave was also practiced over and over again as a last gasp to score. The players executed to perfection and scored the winning touchdown as the clock expired. It was an improbable play, but not lucky.
My first Tennessee experience was the 1966 matchup with South Carolina that I attended with my Dad and Uncle Bill. I’ve been witness to the highs and the lows of Tennessee sports for the many years that have followed that beautiful Saturday at Neyland. I should have enough experience to never count a game as won or lost before time runs out. The Vols were behind at halftime and I, as well as Uncle Bill, was ready to give up. My Dad told me not to worry that there was still a half to be played. The final score was Vols 29 and Gamecocks 17. I was a happy nine year old boy and concluded my Dad knew more than my uncle about football. Do not give up at halftime; do not give up even with only 4 seconds left.
Many people tend to react negatively and want to give up on their investment results just like many of us UT fans after less than stellar first half performances. What are my financial results for this quarter? Why do I own this fund that has shown negative results for the past 6 months? If the markets keep going up I have it made, or vice versa, I am going to lose everything if the market keeps dropping. As a football fan, we may leave a game early and miss an exciting finish. However, making a rash decision with our investments due to a poor quarter can have a lasting impact on long-term results. The S&P 500 had an average annual return of 9.82% from 1991 through 2015. An investment of $10,000 at the beginning of that period would have grown to $103,951. If you had been out of the market for the 1 best day of that period you would have lost $10,788. Missing the 10 best days would have cost $63,630.
The most successful investors have a very long-term focus to give them the best chance at achieving their goals. The most successful football teams have that same long-term focus beyond one game or one season. Take the time and energy to put together a long-term investment plan. Use an independent financial advisor who has the experience to help you prepare the plan, put it into practice, persevere through the upheavals of the market and maintain focus on the long-term goal.
There is no magic formula or secret sauce in achieving investing success. Have a plan and trust the plan. To quote a currently popular football coach, “brick by brick”.