When my daughter was in the first grade, I had the honor of coaching her soccer team.  These little Mustangs consisted of a band of young ladies, most of whom were playing an organized sport for the first time in their lives. Our league did not keep score because the primary goal was to introduce the girls to soccer. Before our first game, one of the girls said to me, “if we don’t keep score, we can’t win.” She was right.  

Most investors don’t keep score, so they don’t know if they’re winning or losing the investment game. In addition, they don’t know what game they’re playing or the road they’re traveling. As the Cheshire cat said to Alice in Alice in Wonderland, if you don’t know where you’re going, it doesn’t matter which road you take. 

How do you know if you are winning the investment game or on track to reach your goals? Here are a few ideas that can help you keep score and increase your odds of winning.

• Financial Plan. A financial plan will help you keep score and guide you towards your goals and assist you in quantifying your hopes, dreams, and fears. It will become your financial GPS, your investment cornerstone.
• Investment Policy Statement. An IPS will address your investment selection, asset allocation, time horizon, and risk tolerance.
• Quarterly Review. A quarterly review is a quick check-in to assess your account performance, investment income, and market conditions. 
• Annual Review. The annual review is a deep dive into your financial plan and investment policy statement. Are you still on track to reach your goals? Do you need to amend your plan? The annual meeting is an excellent time to review every aspect of your financial life.

As a note, the girls kept the score at each game.

I’ve worked too hard and too long to let anything stand in the way of my goals. I will not let my teammates down, and I will not let myself down. ~ Mia Hamm

October 5, 2021

Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management 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 so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.

Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor.