John Hibbert, Trust Officer in our Somerset West office, and former golf coach, shares his observations on the similarities between investment management and the game of golf.
“Establish a game plan before the round, not during it.” Tiger Woods
Golf, a metaphor for investment management
Personal Trust hosts a ‘Retire like a Pro’ session on the first Tuesday of every month at Helderberg Village Golf Club. The event consists of a nine hole golf competition and a golf instruction clinic, which is then followed by a presentation on Investment Management incorporating golf as a metaphor.
In my student years, I qualified as a golf teaching professional (Member of European and World Golf Teachers’ Federation) and taught at various clubs in Gauteng and Mpumalanga over a six-year period.
There is a clear link and similarity between the game of golf and investment management, which has offered me a great platform to engage and educate others. Good results on and off the course stem from consistently applying the basic techniques correctly with a clear goal and focused mind-set. This is ultimately the difference between the weekend golfer (DIY Investor) and the seasoned touring golf pro. The professional golfer realises that success is a team effort of which the outcome is the result and sum of contributions made. The player (Investor) needs to have his swing (Investment Process) kept in check, the manager/agent (FSP/Administration) needs to manage the golfer’s programme, appearance fees, endorsements etc. The golf clubs (Investment Vehicles) need to be customised to the golfer’s game and regularly reviewed (Annual investment reviews).
Extracts from ‘Retire Like a Pro’, 7 October 2014
In our most recent session, we focused on weather conditions (Investment Markets) and also on hazards (Investment Risks). With our local currency depreciating and the share market dwindling by 7% over the past month, it would seem that the investment game is currently hazardous, similar to playing golf in poor and difficult weather conditions. More than ever we have to rely on our golf swing, our clubs and our goals. Many investors attempt to “time” the market by moving funds to different asset classes, very meticulously and methodically trying to predict the different cycles (Equity, Interest, Currency etc …). Research has shown that over 90% of portfolio performance depends on asset allocation. A paper from Standard Bank regarding research of the share market from November 1986 up to 1996 has revealed that if an investor were to have missed the 40 best trading days (out of 2,507 trading days in this period) the return would have been only 1.47%. It is vital to have an experienced coach (Adviser) and caddie (Financial Planner) on hand to guide and assist in times where emotional bias comes into play on and off the course.
At Personal Trust we help you to ‘retire like a pro’. We will assist in shot-making (Fund Selection), create a balanced game (Asset Allocation) and ultimately allow you to realise your potential (Required rate of return) … there may be birdies (Bull markets) along the way, an eagle or two, or a bogey (Bear market) might be carded on your scorecard; however, when you sign off your scorecard we will be sitting pretty at the prize giving (Financial Security) to receive the silverware.
If you are interested in joining us on Tuesdays,
please contact us at the Somerset West office on 021 852 2265.