Have you ever asked yourself around a specific investment you have whether you should buy, sell, or hold the investment? If Tiger Woods was a stock in today’s marketplace, the big question you should be asking yourself is should I buy, sell, or hold Tiger Woods?
The media currently has an insatiable appetite around the Tiger Woods scandal. In my opinion, this lesson around Tiger Woods could be one of the most important lessons around how investing should be viewed in the future, and most something certainly to consider around how you go about portfolio development for the future.
The traditional approach to investing had always been a buy and hold philosophy through some level of asset allocation based upon your time frames, risk tolerances, tax brackets, etc. with the approaching of rebalancing on a periodic basis. In large, this has been the Warren Buffett way of investing. I believe that part of the future of investing will have to include a component of the Jimmy Buffett way of investing which says that “it’s always 5 o’ clock somewhere”. One real thing that should be questioned in the investing world is that can any company you own have a favorite holding period of forever?
If you polled people over the past 5 years before the Tiger Woods scandal and posed the question “Would you buy Tiger Woods if he was a stock?” , most individuals would have lined up to get at many shares of him as humanly possible. Of course, how could it be possible that Tiger Woods could ever take a hit?
When the media broke the story, I thought that Tiger Woods was seriously injured or almost dead. If he was a stock when the story broke, you likely would have seen a sharp decline in his price. Then, just a few hours later we learned that he just had some minor dings and scratches. This may have stabilized his stock. After that, we started to learn that there may have been more to the story which led the public to learn of one extra marital affair, then two, and you know how the story goes from there with the Tiger Woods stock plummeting in the market place. If this was real investing, how could you have insulated yourself from the massive downfall in his stock?
My commentary behind this valuable lesson to be learned from Tiger Woods. Never say forever. Be sure you have strategies to protect the gains you have earned in your portfolio. Even the best and seemingly most stable positions you own could someday take a tragic hit which you might not recover from if you don’t deploy a smart disciplined strategy.
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oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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