Out with the Old, In with the New!
Friday, July 24th, 2009 by Charles Mayfield, CFP®
But what if the old still works? Well, I guess you want a little bit of both.
As many of you have probably guessed from one of Cass’ recent posts (http://atlantaplanningguys.com/?p=239), he is a huge fan of the ponies. I’m not sure that Cass has missed the fastest two minutes in sports since I have known him. Myself, I’m a big fan of that little white golf ball. I grew up with my grandfather having taped every single Masters since I was born. I recall talking him into throwing the old VHS tapes in the player and we would watch Arnie, Jack & Gary duke it out. My first live Augusta experience was in 2000. I was second row on 18 and had a perfect view from behind the ball when Vijay rolled it in for his first and only green jacket. I have some pretty amazing memories when it comes to the game of golf. It has offered me tons of perspective on the world and given me tons of joy.
That said, this Sunday was truly a final round that I will not soon forget. Talk about being torn up. I went to school with Stewart Cink and have always admired his game. I knew that seeing him win his first major would be an amazing sight. However, to watch Tom Watson at the tender age of 59 become the oldest player in history to win a major (by 11 years)…that would have been something special. Frankly, I really didn’t start the day thinking that Cink was going to be there…but as is his normal game…he stuck around and made the field work for every shot. When the playoff started, I really didn’t know who I was going to cheer for. I guess, in the end, I was happy with either. It was another amazing Sunday, and I couldn’t help but think how happy everyone should be for Stewart.
Are you happy with your portfolio’s performance in the past 18 months? Chances are pretty good that you’re still getting over some of the shock from your statements in February/March of this year. I’d be hard pressed to find many folks that would have a resounding “yes” for that question. Relative performance is always a good measure to gauge how you well you stacked up against the rest of the world. By relative, I mean how you performed against indexes and peers. These are things that we measure constantly for our clients.
So how does all this comparing portfolio returns relate to the British Open this Sunday? Simple…you usually cannot count out traditional (time tested) strategies when it comes to making your money work hard for you. Watson’s steady hand and consistent play got him to within an 8 foot putt of victory. In the end, he faded hard and couldn’t finish the job. Your portfolio might have seen its better days. It might be time to usher in some new tactics and ways of looking at diversification and asset allocation. Depending on your situation, if you aren’t incorporating at least a small to modest portion of your portfolio to non-traditional investments (i.e.: alternatives), you may be missing the boat. We can’t forget Tom Watson and what he means to the game, but to compete day in and day out, it may be time to bring in a Cink or two.
Investing in alternative investments may not be suitable for all investors and involves special risks such as risk associated with leveraging the investment, potential adverse market forces, regulatory changes, and potential illiquidity. There is no assurance that the investment objective will be maintained.
Diversification nor asset allocation guarantees against loss nor ensures a profit.
