Putting your finances first: Playing the long game

In the third and final article in his ‘Putting your finances first’ series, Harry Clewley looks at why consistency is key when it comes to professional golf…and your financial planning!

The importance of showing up

With the Masters having been played over the weekend, I’ve been thinking about the prize money professional golfers can win, and it’s clear that even if a player doesn’t win a tournament, it can make for a rewarding pay day. But you don’t have to be ‘number one’ to do well – it’s about showing up and making the cut for as many tournaments as you can!

It’s good advice to not ‘put all your eggs in one basket’, i.e. focusing on one competition in particular. Pro golfers can maximise a range of earning opportunities – endorsements can often be more lucrative than the prize winnings themselves.

The same applies to investing – creating a very diversified portfolio across sectors will help you have a balanced strategy that can evolve and stand the test of time. The main thing is showing up, and creating a plan!

Sticking to the game plan

“You can talk to a fade, but a hook won’t listen.”

Lee Trevino’s famous comment about his preferred shot shape demonstrates the importance of opting for a ‘shot’ you know you can control. One move can be the difference between making and missing the cut for a tournament – and the same can be said for your finances. No matter how detailed your investment plan, it can all come to nothing if you don’t allow for the human who has to ‘play the shot’. Market volatility is normal, as is the feeling of being overwhelmed by the value of your investment portfolio moving up or down.

That’s why it’s important to invest consistently over time, within your budget. Each April, there’s a new tax year (in fact, the 2021/22 Tax Year started on 5th April 2021, which coincidentally fell during Masters week!) where it’s important to make the most of your annual allowances, from pensions to ISAs.

Investing regularly – and early – can help you take advantage of the power of compounding, and will enable you to keep your eyes focused on the horizon, as you look to achieve your long-term financial goals.

Getting back on track

Just like professional golfers, you’ll have ups and downs as an investor, and unexpected events can threaten to send your ‘game’ off course. So, if you’ve found yourself in a Brexit bunker, the dense woods of the US–China trade war, or the vast lake of the pandemic, it’s important to revaluate your strategy and make sure you’re still on track.

It’s worth remembering that market rises and falls are part of investing. No one likes to lose money, but history suggests that selling is usually an inappropriate response to unfolding events.

Alexandra Loydon, Director of Partner Engagement and Consultancy, recently told SJP:

“I am really encouraged to see that people have continued working on their goals over the last year and have simply adapted their path, focusing on long-term stability rather than short term turbulence.

“With the constant change so many have experienced, it would have been easy to abandon plans or simply put them on hold. However, our research shows that in fact people have become more flexible and adaptable, with family relationships and health goals balanced with career and money ambitions, and many now considering a financial goal an important part of their life plan.”

Playing the long game

To summarise, it’s clear that you don’t have to be at the top of the podium to do well in golf and investing – and this applies to a good financial adviser too. From our point of view, it’s not always about picking the number one funds, but about the consistency of good performance relative to our clients’ goals and aspirations.

Whereas for golf it’s about making the cut, the important thing for your personal finances is making that first move towards your financial goals, whether it’s talking to an adviser, or even starting to make pension contributions.

Remember, a financial adviser is like a caddie! By building a close long-term relationship with our clients, we’ll help you play the long game – from preparing for life events that are ‘par for the course’ to reacting to unexpected bunker shots.

I hope you’ve enjoyed my ‘Putting your finances first’ series.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise.  You may get back less than the amount invested.

Contact us today

If you have a question about taking financial advice or would like more information about my services, please contact Wellesley Wealth Advisory on 01444 244551 or via email at info@wellesleywa.co.uk.

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Author: Harry Clewley
Author: Harry ClewleyAdviser
harry.clewley@sjpp.co.uk