This week George and I went to Tallahassee’s Forestmeadows Tennis Complex to watch the USTA Tallahassee Tennis Challenger event; an annual men’s professional Challenger series tournament. I noticed some aspects of the game that seemed analogous to being a financial advisor and the world of investments. Here are 5:
1)One thing that stuck out to me while watching a singles match was that tennis is an incredibly lonely sport. Aside from it being an individual sport, the net provides a clear separation of territory. Players talk to nobody but themselves and their success and failures are theirs alone. It can be that way when investing too; some accounts are even legally registered as “Individual.” Investors open brokerage accounts on online sites with no Advisor and buy and sell equities on a completely self-directed basis. Their successes and failures are theirs alone. This leads to…
2)Unforced errors. I watched both a singles and doubles match where it was quite obvious that if one player could cut down on the unforced errors then he would be winning by an insurmountable amount. The unforced errors were keeping the match competitive to the opponents’ benefit. Granted, this is commonplace in tennis. It reminded me of what I would consider an unforced error in investing; buying high and selling low. As shown below, investors can get caught in the trap of letting emotion and ego dictate their trades. With the help of an advisor you can inject a bit more objectivity into your portfolio to, among other things, better manage performance.
3)Teamwork. During a doubles match you can feel one player’s dependence on his teammate’s success. They celebrated the successes and provided encouragement following a failure. They utilize verbal and nonverbal communication as part of their strategic method. Most importantly, there were several instances where one team member missed a volley near the net and his teammate was behind him ready to return the shot. An advisor serves all of those roles, always ready to work together with his clients to accomplish the stated objectives. Serving as a fiduciary, we are bound to always act in the best interests of our clients and be the best teammates we can be.
4)There was no shortage of high end equipment on the court. Each player arrived on the court carrying a bag full of tennis racquets, all branded with their sponsor’s logo. Undoubtedly these racquets were the latest professional models laced with the highest performance string. At the elite level competitors have to use elite equipment, if for no other reason because their opponents will be and they can’t give up any edge. Using the best available technology is one of the primary strategies at Smith Bruer Advisors. We strive to use and offer the most advanced technology available to best serve our clients.
5)The most powerful force I noticed at the event was momentum. It swung back and forth from player to player throughout a very closely contested match and the man who held it longest proved to be the victor. I witnessed a player who seemingly had no chance of winning his match slam his racquet into the ground, and then facing match point in a second set tiebreaker win the set and then ride the momentum to a 6-2 win in the third set to win the match. As an investor, you must be prepared to expect momentum changes and know that it is a part of the experience. Markets will rise and fall and you may feel like slamming your racquet but as I mentioned above, you do not want to react in a manner that will be detrimental to your portfolio, i.e. panic selling. Working with an advisor will provide you with a teammate to help you navigate those changes, maintain focus, and reach your financial goals.