I have commented in the past about my passion for golf and how simple it is to be a successful investor versus the challenges of being a successful golfer. As those of you who play golf know, very few non-professional golfers are able to shoot par. It is extremely difficult. You’ve all heard the expression “that’s par for the course” used to describe a common expectation about virtually any endeavor or situation we might experience. But, when it actually comes to golf, expectations are far less than par. If I went to my golf lesson today and my instructor told me he had discovered a simple way to shoot par, I would be ecstatic and embrace his advice immediately. Unfortunately I know that’s not going to happen.
When it comes to investing however, it’s a different story. For me “par” is the “market rate of return.” And unlike golf professionals, “professional money managers” find it very difficult to “shoot par.” Fortunately, you as an investor, can easily shoot par. If you’re not convinced, find an advisor that is “shooting par” and they will teach you.
Before accepting “passive investing” and realizing it would make me a “par investor,” I shot way too many “bogies” using active management. But “Wall Street” wants you to believe they can shoot par (or better) but unfortunately, they are like the weekend golfer, who will continue to shoot bogies no matter how hard they try to make par. Your golf bogies may create a great deal of frustration as they show up on your golf scorecard. But it is nice to know that the “professional money manager’s” bogies are not going to show up on your “investment scorecard.”