It doesn't matter whether you're playing Augusta National or your local public course. It doesn't matter whether it's a beautiful, warm sunny day or a cold, blustery, rainy one. You are guaranteed to shoot par.
Do this over the course of your lifetime and your performance will surpass all but the Tiger Woodses of the world. In fact, shoot par day in and day out and you'll probably end up in the Golf Hall of Fame!
This is because par is not average. Par is just the benchmark all golfers use to measure their performance. Most golfers will never beat par in their lives, let alone do it consistently.
For investors, the index (usually the S&P 500) is the benchmark used to measure their performance. And as is the case with par in golf, the index is not average.
Most investors will fail to match (let alone beat) the index. Even the investment "pros" usually fall short of the benchmark. In fact, in any given year approximately 80% of all mutual funds underperform their benchmark index.
How to Shoot Par With Your Investments
The good news for investors is that it's easy to "shoot par" when it comes to investing. By investing in index funds or ETFs, investors can tie their returns to those of the index. No matter what the situation or what the market conditions, index investors will achieve returns that match the index.
Do this over the course of your lifetime and you can increase your odds of a comfortable retirement – which will give you plenty of time to work on that golf game!
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1 comment:
Great article! It really breaks it down and explains why hitting a benchmark sure isn't average. Keep up your good work.
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