playing baseball

Investors: Keep Your Eye on the Ball

July 5, 2022
Michael ListBy Michael List, CFP®
Investment Management Officer

As Tom mentioned last week, baseball is a sport of failure, and that is true but nuanced. On offense, failure is expected, even the best hitters fail to get on base two out of every three at bats. When it comes to defense, on the other hand, mistakes can be catastrophic.

With investing, it is vital to limit errors, as well.  Investing has components of both defense and offense — preserving the value you have entrusted to us and growing that over time.

The first half of 2022 has been difficult for all investors and the second half of the year will bring new challenges.  The investment adjustments we made in late 2021 and early 2022 have been beneficial. Portfolios were overweight in value stocks, short term bonds, and inflation protected bonds. In hindsight, it would have been better if we were more overweight, but we believe these are still appropriate for the remainder of the year.

In baseball, physical errors can happen to anyone (the ball takes a bad hop and bounces over the infielder’s glove, for example). Mental errors, on the other hand, happen when you are unprepared or not paying attention to what is going on around you. These are far more costly.

In these times, it can feel like the physical risks compound on one another: war, inflation, recession. However, to avoid mental errors, we want to keep our “eye on the ball” and focus on the fundamentals of our investments: diversification, valuation, cash flow, earnings and quality balance sheets.

The next time you watch a baseball game, keep an eye on the outfielders. Anytime a batter hits a fly ball, the outfielders’ first step will always be backward.  It’s part of their fundamentals practice, a little habit that often goes unnoticed, to ensure the ball stays in front of them.

Whether we're talking about baseball or investing, when we stick with the fundamentals, actions may seem boring or even unnoticed — but that is how we limit mistakes. Reach out to us today to review your investments!

About the Author

Michael List, CFA, CFP®

Michael List is an Investment Management Officer within Security National's Wealth Management Division. Michael earned his Bachelor of Science in Business Administration with a concentration in Finance and Economics from Creighton University and holds the esteemed Certified Financial Planner, CFP® certification. List helps execute investment strategy, transactional execution and overall portfolio management. Having dedicated 14 years to the field of Wealth Management, Michael List brings a wealth of experience to his role, contributing to the success and growth of Security National Bank since 2008.