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General Investing

Long vs. Short Game: How Investing Is Like Golf

Being successful at golf—and investing—involves considering how close you are to your goal.

A golf ball on the green.

Key Takeaways

Choosing the right strategy and the right level of risk is crucial in both golf and investing.

The further you are from your goal, the more risk you can likely take.

It’s important to balance risk with other factors that can affect your game.

Adjusting your investment strategy based on changing conditions is essential for long-term success, just like adapting your approach on the golf course.

Shot Selection and Investment Strategy

Standing at the tee, golfers consider the hole—sand traps, wind speed and direction, which club to use, and so much more—before making decisions on how to play it.

Taking risks with powerful swings straight toward the green could result in a good score—or your shot could veer into a sand trap. A more measured approach might be a better strategy to help avoid penalties from various hazards along the way.

Investing also involves careful decision making. Choosing riskier investments in an attempt to boost account balances or to compensate for a lack of saving could put your money in a precarious position. On the other hand, being too conservative may prevent you from reaching your goal.

In both cases, where you are on the course can help determine how much risk to take.

A good player who is a great putter is a match for any golfer. A great hitter who cannot putt is a match for no one.
Ben Sayers

The Long Game: Tips for Growing Your Money

The longer you have to invest, the more risk you can likely take because you have more time to recover from setbacks.

When it comes to retirement portfolios, we believe it may make sense for young investors with many working years ahead of them (and comparatively small balances) to maintain a larger allocation to stocks.

The power of stocks and other risky assets lies in the higher growth potential they offer. This may help combat the key threat of longevity risk—the risk of not being able to fully fund retirement.

However, you need to balance these allocations against other factors that can have adverse effects on account balances, such as market risk and tail-event risk.¹

Time: How Long Before You Need the Money

The longer you have to invest, the more risk you can likely take because your investments have time to recover from market drops.

Generally, the closer you are to your goals, the less risk you’ll want to take.

The Short Game: Tips for Preserving Your Savings

Too much unrestrained power can be disastrous once you’re on the green.

Likewise, as your working years draw to a close and account balances are higher, the downside potential of stocks can result in large losses that are difficult to overcome. That’s why you may want less stock exposure in your portfolio at age 65 than at age 25 or 35, for example. Balancing risk and reward is a key part of your strategy.

It’s also important to remember that investments are penalized more from losses than they are rewarded from gains. Why? For every loss your portfolio experiences, you need an exponentially higher return to break even.

Gains and Losses Are Not Created Equal

For every loss your portfolio experiences, you need an exponentially higher return to break even.

Where Are You on the Course?

There are many threats to your financial well-being, and the threats will change over time. Your investment mix should, too.

Risk Considerations for Your Long Game and Short Game

Hypothetical Allocations as Retirement Nears

Aim to Finish in the Lead

Knowing the variety of risk factors and how they ebb and flow over time as course conditions change may help you make better investment choices.

Weighing risks and rewards is important for decision making. It’s true for golf; it's also true for investing.

Are your investments ready for the long term? Let's talk.


The risk of some rare, very unusual, but nonetheless expected event.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Diversification does not assure a profit nor does it protect against loss of principal.