Nebraska Football has a storied history. It’s regarded as one of the best football programs of all time. Since 1890 they’ve won 893 games, more than all but four schools, and claimed five National Championships: 1970, 1971, 1994, 1995, and 1997. Three of their players have won the Heisman Trophy: Johnny Rodgers, Mike Rozier, and Eric Crouch. Tom Osborne and Bob Devaney combined to coach the Cornhuskers for 36 years. These two icons accounted for 40% of the wins an all five of their National Championships.
Their defensive unit is known as the Black Shirts. They started wearing the jerseys in the 60s, so the coaches could tell the difference between the offensive and defensive players. The coaches started to recognize individual players for their stellar defensive performance and they’d award the best players with the Black Shirts. What started out as a way to differentiate the units is now a sign of honor and respect; it must be earned.
Scott Frost is the current head coach of Nebraska, his first year coaching the team. He was hired to restore the winning tradition at the school. Unfortunately, they have yet to win a game. They’re winless in their first six starts – a first for Nebraska football and the Cornhusker faithful are not happy.
As a quarterback, he led Nebraska to an undefeated season and their last National Championship. His record as a starter was 24 – 2 and he’s considered one of Nebraska’s all-time greatest players.
Mr. Frost was the head coach at the University of Central Florida. In his first year as the head coach, 2015, they lost all their games, 0-12. The next year they won six games and qualified for a bowl game. In 2017 UCF went undefeated and beat Auburn in the Peach Bowl. They finished the year ranked 6th in the country, but they declared themselves national champions.
Mr. Frost has a winning formula that has worked as a player and a coach. His system worked at UCF and it will work at Nebraska. He’s not going to abandon his system because of a few losses. If he sticks to the script, he’ll start winning games.
What does Nebraska football have to do with investing? Plenty. Investors who follow a script or system will do well because they don’t get flustered during times of lackluster performance. They know, eventually, their system will produce winning results.
Diversified portfolios are currently underperforming the market and investors are becoming impatient. Asset classes like emerging markets, real estate and bonds have been a drag on portfolios; growth stocks are outperforming value stocks. You may want to punt your portfolio, but don’t as no trend will last forever. It’s easy to let short term market moves hinder your long-term views.
What should you do if your portfolio is not living up to your expectations? First, review your playbook, your financial plan. Your financial plan will guide you on how best to proceed. Are your goals still intact or do they need adjusting? Divide your goals into needs and wants to identify those things that are most important to you and your family. It’s likely your still on pace to achieve your goals despite the recent dreary performance in the global markets.
Mr. Frost and Nebraska are building a foundation that will eventually bear fruit (corn). Is your portfolio positioned to perform well over the next several years? If your portfolio is based on your financial plan, then it will deliver solid results over time.
Last, you reap what you sow. Spend less, save more, diversify your assets, so when you’re ready to harvest your account for living expenses you’ll have plenty of assets for you and your family to enjoy.
Throw the bones and buy the dip!
He told them, “The harvest is plentiful, but the workers are few. Ask the Lord of the harvest, therefore, to send out workers into his harvest field. ~ Luke 10:2
Bill Parrott is the President and CEO of Parrott Wealth Management firm located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process.
Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.