What Pickleball Can Teach You About Investing
If you had gym class in school, then someone probably told you there are life lessons to be learned from playing sports. You learn not only how to win or lose, but also the value of humility, sharing, confidence, and so on. However, what getting hit in the face with a dodgeball is supposed to teach, other than pain, is hard to say.
Does the ability of sports to impart knowledge extend to investing your money? In the game of pickleball, it just might.
Pickleball is a racket sport. It is also one of the fastest growing sports in America. According to the USA Pickleball Association, there are more than 150,000 pickleball players in North America. A major contributor to pickleball’s participation growth is its popularity throughout retirement communities. The sport can help fulfill some of retirees’ long-term goals such as staying healthy, social and competitive.
Coincidentally, the nuances of pickleball can double as lessons on how to reach for your long-term financial goals. No, it doesn’t provide complex sabermetric data, like “Moneyball,” in which to create an elaborate, inimitable investment strategy. Rather, the sport of pickleball is a resource for understanding basic investment principles that can be just as valuable.
Remember the whole is greater than the sum of its parts. Pickleball is a combination of three different sports: tennis, badminton and ping pong. Mixing separate sports to create one, exciting game is reminiscent of the role of diversification in your portfolio. A diversified portfolio holds a broad mix of investments across different asset classes, like stocks and bonds. Together, the characteristics of each investment determine the portfolio’s overall risk and potential for growth.
Seek much for less. Enjoyment from sports shouldn’t come with a high price tag.Fortunately, pickleball is an inexpensive sport. Essentially, all you need is a racket and a wiffleball. There are no course fees or cart charges. Similarly, investing should be a low-cost activity. Whereas costs can diminish enjoyment in recreation, costs can diminish your investment returns. The more you pay, from adviser fees to trading costs, the less of your return you will keep.
Practice good communication. Pickleball is played with singles or doubles. Successfully playing with a partner requires teamwork, much of which is based on good communication. The same applies to finances, where your partner is most likely your spouse. It’s essential that each of you clearly understand your family’s finances, including beneficiary rights for things like pensions, social security and required minimum distributions. In the event one passes, a succession plan should be in place and the survivor should be prepared to take over investment responsibilities.
Don’t wait to play. Pickleball is a relatively simple sport to play, which is why so many first-timers can pick up a paddle and just start playing. Although it’s not as simple, there really is no right time to start investing. Waiting for opportune market conditions before investing is a form of market timing, which can be a loser’s game for two reasons. One, it is exceedingly difficult to consistently buy the right investment at the right time over the long run. Two, staying on the side lines can result in missing out on some of the market’s best trading days.
Think long term. You use your mind as much as your feet when playing pickleball. Chasing after an errant wiffleball that takes an unexpected turn midflight or an unusual bounce is a waste of energy. Instead, it’s better to follow a game plan and ignore the occasional fluke. Likewise, the market can move wildly on any given day. Those short-term swings shouldn’t affect your long-term focus. Chasing returns – investing based on recent performance – usually results in wasted profits. You have a higher probability of achieving your financial goals by staying the course and focusing on what you can control, like your costs and your asset allocation.
Always be mindful of risk. In any sport, it’s important to be mindful of the risk of injury; especially, as you age and it becomes harder to recover. When investing, you should be just as considerate of your age and investment risk. In retirement, for example, you likely have limited income sources and a shorter investment time horizon, making it more difficult to recover from financial losses. Therefore, it can be safer to reduce the amount of riskier investments, such as stocks, in your portfolio to try to preserve your wealth.
Playing sports can be a learning experience in more ways than one. There are lessons to be learned about the game as well as life. And, when it comes to pickleball, it can also teach you a few tips about sensible investing.