In capturing the PGA Championship yesterday, 50-year-old Phil Mickelson became the oldest winner of any of golf’s four major championships. He broke a record that had stood for 53 years. Julius Boros was the previous oldest major winner, taking the 1968 PGA Championship when he was 48.
As one who loves the game of golf and sees countless life lessons in the game, here are a few take-aways that relate how we manage money.
Pay no attention to others
After the third round in this year’s PGA, Mickelson had a one-shot lead, but at one point in that round, he had a five-shot lead. In the space of just two holes, numbers 12 and 13, he dropped three shots. On the 13th hole, after watching his playing partner, Louis Oosthuizen, hit his tee shot into the water, Mickelson did the same thing. Following the round, he was asked whether he should have played more conservatively off the tee, especially after watching what Oosthuizen did.
Reporter: “Was there any thought about just bunting it out into the fairway after seeing what he did?”
Mickelson: “No, what he does doesn’t affect what I do.”
I love that answer. Such a simple statement — that says so much. Mickelson and his caddy had their game plan and they were all about sticking with that plan. It didn’t matter what other players did.
While things didn't work out very well on that hole, what if he decided to adjust his strategy everytime his opponent did something especially good or espcially bad? He would be filled with doubt, wondering what his game plan would be moment by moment. That's no way to play golf, and it's no way to invest.
As investors, isn’t it easy to be distracted by what others are doing? We hear friends talk about what they’re investing in and it makes us question what we’re doing. It tempts us to change course and follow their investment ideas.
Once you’ve chosen an investment strategy tailored to your unique situation and goals, there’s wisdom in ignoring what others are doing.
Keep your emotions under control
Few of us can imagine the sort of pressure of playing in the final pairing in the final round of a major championship. Mickelson followed a routine before every shot that was clearly designed to help him stay calm. He stood behind the ball for about 20 seconds, visualizing the shot he intended to hit, and taking several deep breaths. Then he walked up to the ball and made his swing.
“I’ve tried to stay more in the present and with the shot at hand, not jump and race. I’ve tried to shut my mind to a lot of stuff that was going on around…I was just trying to quiet things down because I’ll get my thoughts racing and I just really tried to stay calm.”
Investors face a lot of pressure as well. Especially when the market gets volatile and makes sharp downward moves, it’s easy to get rattled. That may take the form of feeling worried or stressed. It may impact our mood, which can seep out into our relationships. But it doesn’t have to.
Last year, when the market fell 34% from mid-February to mid-March due to concerns over the rapidly spreading COVID-19 pandemic, that was a frightful time filled with countless unknowns. For many SMI members, it was a time to breathe in God’s Word. In a survey, more than 500 members listed over 70 verses that they turned to for peace and strength. Reading those verses was such an encouragement that we put them into a PDF document. I highly recommend that you download it, read it right now for encouragement, and keep it at the ready for the next market downturn.
Stay with it
No one could have predicted a Mickelson victory at this year’s PGA Championship. He had missed the cut in two of his last four tour events and was ranked 115th in the world. But he stayed with it, kept doing the work, kept playing tournaments.
The equivalent for investors is to experience a period of underperformance with the strategy they’re following. It’s easy for doubt to creep in, isn’t it? That’s why we strongly suggest that people fully understand the strategy they’ve chosen to follow and make sure it’s well-suited to their circumstances and goals. If it is, stay with it.
To be sure, that’s sometimes easier said than done, but that’s one of the most important benefits of following an objective, mechanical, rules-based strategy. As long as you understand how it works, are clear about what it’s designed to do and not do, and have chosen it because it’s a good fit for your age, temperament, and objectives, all of that should help you stay with it in good times and bad.
So, congratulations to Phil Mickelson on a remarkable win this weekend. And if you are able to invest while tuning out the noise of what others are doing, if you have found a way to stay calm in the midst of high-stress market situations, and if you are using a strategy that you can stay with come what may in the markets, congratulations to you as well.