Set the objective of the game

Nate Crosby |

Getting the Objective Right: Investing & The World Cup 

My wife and I watched the U.S. women’s World Cup game against Sweden. A game in which the U.S. dominated time of possession as well as shots on goal. It was clear to even a novice soccer fan like me that the U.S. had the faster, flashier players. They lost. Despite the U.S. having better athletes, they lost because the objective of the game was to score more goals than the opponent. Not hold the ball longer. 

There is an investment analogy here. How did your portfolio compare to the S&P 500? How did it perform against the NASDAQ? Did you beat the market or trail its return? These are all useless questions unless you define investment success by the return of an index. Most people don’t. For many of us, their investment goals center around independence. They save and invest so that they can control their time. They don’t want to live paycheck to paycheck and they want to be able to call their own shots. Grandparents want to be able to take their grandchildren to the amusement park or beach at a moment’s notice. For these people, investment success is tracked by how well the plan allows the individual to obtain their stated goal.   When asked, “How is retirement going?” I have never heard anyone respond, “Great, my account is tracking the index perfectly.”  What I hear is, “Great, I took my nephew to the zoo on Thursday,” or “I helped my daughter buy her first rental property.”

The perfect investment mix for goal-oriented investing is as unique as the individuals. At 46 years old, one may be shocked to know that about 15% of my investment strategy is in money markets and treasury bills. I own physical gold, silver, and copper. Why? The reason is I never plan on selling my stocks, ever. I’d rather just collect their dividends as passive income. That strategy works for me. It lets me sleep soundly at night because I know I am not a missed paycheck away from financial disaster. I know I won’t be forced to sell my stocks to pay for emergency expenses. How does my plan compare to the major market indexes? That’s irrelevant to me. My plan works for my family, it may not work for yours.  

One of the best things you can do as an investor is clearly define what investing success looks like to you. Then as you meet with your advisor annually, you ask, “How well is my investment plan tracking toward my definition of success?” This strategy will help you avoid all the noise on social media and financial news. Let their version of success be theirs, what is yours? 


Please note: This content is not a direct recommendation for investment. Investing involves risk including the potential loss of principal. Not all investments are suitable for all people. Crosby Advisory Group, LLC is a registered investment advisor in Ohio, Florida, and Texas.