For the non-golfers you may ask, “Who is Jordan Spieth?” But like Michael Jordan and Derek Jeter, Jordan Spieth is one of those characters who nearly everyone now knows, golfer or not…sports fan or not.
Jordan Spieth is, of course, the 23-year old professional golfer who is nearly topping the record books with his winning of three major professional golf tournaments before the age of 24. His win at “The Masters” back in 2015 (at age 21) was almost as publicized as the Cubs winning the World Series. At the end of that same season, he won the season-long (nearly 11 months) “FedEx Cup” which comes with a bonus of… $10 million.
So, what can Jordan Spieth teach us about investing? In his latest major win — at the British Open last weekend in England — Jordan Spieth displayed several classic characteristics and skills that we all can incorporate into our lives, especially our investing lives.
- Keeping emotions at bay.
- Knowing and understanding the Rules (which can be equated to understanding the concepts, or rules, of Asset Allocation)
- Taking advice
In summary, Jordan Spieth, at 23 years of age, under the pressure of competition and performance at the highest level, before a world-wide audience, kept his cool amidst a near crisis.
Equate this to the investor who has worked or built a business, saving over her or his entire life, and amassing $2 million, $3 million… $10 million+. This level of savings comes with pressure: Pressure to preserve — and perhaps grow — that savings. Emotions and ego will definitely enter the picture. We are human. BUT how the person understands and thus handles the emotions — and rules and concepts — involved in the situation will determine ultimate success (whatever “success” is to that person)… or failure.
Knowing and understanding the Rules of Golf can be equated with understanding the concepts, or rules, of Asset Allocation. There is the basic Stocks-Bonds-Cash equation. Then there are the finer points of the proportions of various stock categories, various bond categories…international versus domestic…and ways to hold cash.
Taking advice is something that can come hard for certain people and certain investors. But in comparison to Jordan Spieth upon being crowned the famous “Champion Golfer of The Year” by the Royal & Ancient (one of the worldwide governing bodies for the sport of golf) the accomplished champion stated that the trophy was “just as much [his caddy’s] as it was his”. Talk about taking advice in order to succeed! Advice costs money (caddies are typically paid somewhere in the neighborhood of 10% of his golfer’s prize money). But for those looking for success in the long-run, advice can be the difference.
Finally, patience. “Patience is a virtue” as they say. In this case, it took Jordan Spieth an unusually long 30 minutes (normally a 10-minute time span) to play Hole #13 on the final day of the Open Championship, where he briefly fell to one shot behind…after being 3 shots ahead earlier. Equate this to making a killing in a “hot stock” or even the S&P 500 over the past 5 years. But then realizing that those gains need to be preserved over the next 25 years with volatile markets to come?! (How about a perhaps slightly boring but diversified portfolio that takes a bit longer to grow but that minimizes risk and reduces costs?) In Jordan Spieth’s case because of his knowledge of the rules, his poise, and the advice and guidance he took from his caddie AND rules officials, he made a patient — and prudent — decision. And he won.