Drivers, start your engines!
This year marks the 107th running of the Indianapolis 500 – “The Greatest Spectacle in Racing.” Drivers will travel over 225 miles per hour to pursue auto racing’s most iconic trophy. Ray Harroun, the 1911 winner, averaged about 75 miles per hour, slower than you drive on I-35.
Race day is exciting, and the pageantry is legendary as crowds pour into the brickyard to be part of the spectacle, and millions more watch it on TV. The singing of our National Anthem, “Back Home Again in Indiana,” and the stealth bomber flyover add to the day’s enjoyment.
Most of the attention will be on the drivers, and rightly so, as they’ll be the ones responsible for executing the plan. However, behind them is an army of support staff, including pit crews, strategists, spotters, spouses, and owners. Teams work as one to make sure the driver can win the race by strategizing and planning for a successful outcome. Their plan is their road map for the race, and they must adjust it based on new data like car performance, track conditions, and weather as the race continues.
In addition to a fast car and the driver’s skill, they must have a little luck to win the race. In 2011 Dan Wheldon was trailing the winner until the last lap when J.R. Hildebrand’s car hit the wall on the final turn. Hildebrand’s accident allowed Wheldon to win. Wheldon would’ve finished second, at best, had Hildebrand not crashed.
Regardless of how fast these cars travel, the driver will pass and get passed by others. They’ll spend most of the day jockeying for a position to win, and it’s essential to focus on their team goals and not worry about the competition, emphasizing the process, not the result.
Before the start, analysts, seers, and prognosticators offer insight and predictions for the upcoming race – most of which won’t come true. Drivers and owners must ignore the noise and concentrate on their team goals.
Unfortunately, drivers may experience a crash. When this happens, the yellow caution flag flies, and they must slow down for the clean-up crew to clear the track before racing resumes. Accidents and crashes are unexpected, of course, so it’s best to try and minimize the damage.
What can an investor learn from the Indianapolis 500? Here are a few thoughts.
- Drive your race. People travel at different speeds to reach their financial goals. If you’re on the right track, don’t worry about others.
- Create a financial plan. Your plan will help guide you through the race of your life and keep you grounded during all market conditions. You, like the drivers, need to adjust it as you obtain new data and information.
- Work with your team to achieve your goals. A driver doesn’t compete alone, and nor should you. A group of trusted advisors can help you with all your financial needs. A CPA, an attorney, and a financial planner should be on your pit crew.
- The media and other experts will try to distract you from your plan. News headlines will make you question your investing goals, so it’s best to ignore them and concentrate on following your plan.
- Diversify your investments. In the market, as racing, crashes happen, and predicting one is impossible, so your best defense is a diversified portfolio of stocks, bonds, and cash. Your investments should be a function of your plan and financial goals.
- Celebrate your wins. It’s essential to enjoy the fruits of your labor. If you’ve reached a goal, celebrate it and then turn your efforts to the next one.
After 500 miles, the checkered flag drops on the winner, and the driver celebrates by drinking milk and kissing the bricks at the finish line. The team will celebrate the victory for a few days and plan for the next race. You might not pass under a checkered flag when you’ve achieved your goals, but you’ll know when you’ve won your race.
Nothing compares to the Indianapolis 500. ~ Mario Andretti
May 13, 2023
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 your asset level.
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