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How U.S. Open Winners and Successful Investors Manage Their Risks

GolferonGreen_UniversityoftheFraserV_Flickr-e1434142906600Back in 2006, during the U.S. Open’s final day of play, Phil Mickelson stood on the 18th tee at Winged Foot Golf Club with a one-stroke lead over Geoff Ogilvy, giving him an opportunity to capture his first victory in that prestigious tournament. After a wayward tee shot, Phil, who is known for his risky style of play, tried to carve his next shot out of the woods. His bold attempt for the green caught a tree branch, then a sand trap, and all was lost.

Those of us who watched the carnage live on TV still remember the sinking feeling in our stomachs as Phil gave away a tournament we all knew he so desperately wanted to win. During the post-tournament press conference, when asked about his risky decisions on the last hole, Phil mustered the now infamous explanation, “I am such an idiot.”

Nine years later, and still without a U.S. Open win, Phil will have another opportunity to capture that elusive title next week at Chambers Bay Golf Course in Washington state.

I had the privilege of playing Chambers Bay in a college golf tournament when it first opened. I can assure you it is a daunting course that will present incredible challenges, even for the world’s top players. If Phil is to have a chance at winning this year, he will have to learn from his past mistakes. Continue reading “How U.S. Open Winners and Successful Investors Manage Their Risks”

Three Essential Elements of a Great Financial Plan

20150323_091018“Spring is the time of plans and projects”

–          Leo Tolstoy – Anna Karenina


Spring is always an exciting time of year. As the world around us awakens from the winter, we all seem to experience a bump in energy and commitment to the plans and projects we outlined at the turn of the year.

For those of us living in Minnesota, the relatively mild winter and early spring has been an extremely welcome change after the winter that never seemed to end in early 2014.

However, those of you on the east coast and in the western US are coming off extremely unusual seasons. On a recent trip to Park City, a fellow skier from New York was lamenting that they traveled all the way across the US for a ski trip when would have had better snow in Vermont.

Spring break is a common time of year to execute some of our plans. Unfortunately, because we choose our destination well in advance, we can’t always control the weather when those dates arrive. What we can control, however, is how we respond when our plans do not turn out the way we envisioned.

Not feeling in control can be unsettling. But just like you have snow shovels, umbrellas and emergency kits for various weather situations, your financial plan is designed to provide some reassurance and resilience during inevitable market and life volatility. We worked with you to create a plan that helps you keep your focus on the people, the causes and the passions that bring you the most fulfillment. Continue reading “Three Essential Elements of a Great Financial Plan”

Market Peaks – The Intersection of Paralysis, (Over)Confidence and Complacency

SnowbirdOn a recent trip to Park City, Utah, we ventured over to the most intimidating ski terrain I have ever been to – Snowbird Resort. The mountain is littered with steep grades and cliffs, exposed rock, narrow cat tracks and some of the highest ski lifts I have ever been on.

If you take any of the lifts to the peak of the hill, you can see very little in any direction except the edge of the narrow ridge you are standing on and other mountains off in the distance. There is – quite literally – nowhere to go but down…and fast!

As US markets linger near all-time highs, many investors are starting to feel like they are standing at the peak of Snowbird. Continue reading “Market Peaks – The Intersection of Paralysis, (Over)Confidence and Complacency”

The Easiest Way to Reduce Financial Stress and Drop Your Handicap

golf-wallpaper-2400x1350Last year Rory McIlroy finished in the top 10 in 12 of 17 events and won 2 Major Championships establishing himself as a legend in the making. Those who have had the privilege of watching Rory play in person notice what an incredible ball striker he is and immediately fall in love with the distinct sound of his perfectly struck irons as they compress the ball into the turf at impact. Unfortunately, you’ll presumably never be able to produce that sound yourself. The good news is you don’t have to.

The most impressive statistic contributing to Rory’s successful 2014 is that he was able to navigate 1,224 of professional golf’s trickiest greens with only 23 total three putts.  To put this in perspective, that’s only one 3 putt every three rounds.

I’m not sharing any revelatory news in saying that PGA tour players are excellent putters and you need to get better if you want to lower your scores. But WHY are PGA tour players better? And what is the fastest way for you to putt more like them? Continue reading “The Easiest Way to Reduce Financial Stress and Drop Your Handicap”

The Art of Winning Ugly in Golf and Finance

“Good golfers, I think, have to get over the notion that they only want to win by hitting perfect shots. They have to learn to enjoy winning ugly. And that entails acceptance of all the shots they hit, not just the good ones.”

 – Bob Rotella, “Golf is Not a Game of Perfect”

60 FooterI am unable to vividly recall many things from my high school golf career, but there is one shot that I will never forgot…and I didn’t even hit it.

As a junior, I was the #4 or #5 golfer on our varsity golf team in a conference that would be considered far from elite. My scoring average was somewhere in the range of 40 for a 9-hole match, which ranked near or at the top of the conference for that position on a team. Most of the players I would be paired with would shoot closer to 50 than 40. Needless to say, none of us were playing for college scholarships.

One match, I was paired with an 8th grader from a nearby school. From the moment he missed the opening fairway, I knew the kid had some talent, but completely unreasonable expectations of himself. Continue reading “The Art of Winning Ugly in Golf and Finance”

Winter 2015 Newsletter and Q4 2014 Reports

Last week, we mailed out our investment reports for the fourth quarter of 2014 along with a copy of our winter 2015 newsletter. An electronic copy of the newsletter is available for download here.

We included a one-page flyer in your reports package relating to an open house we are having on February 12th from 4-7pm. All of you are invited to stop by, see the office, have a drink and enjoy some light appetizers. Those of you having your returns prepared by Pitzl & Pitzl may drop off any tax info you have received, and those of you who are interested in having your returns prepared by our office will have a chance to meet our CPA’s.
Here’s to a happy and healthy 2015! 

This Holiday Season, Ignore the Relatives

‘Tis the season to gather and celebrate with friends and family. Each year, old traditions are remembered and new traditions are made. We reconnect with the family members we see frequently and long-lost relatives alike. Reliability has become an evasive quality in today’s busy world. In the craziness and uncertainty of our day-to-day lives, we take solace in some of the certainty that these events provide.

In some families, it is a holiday tradition to attend church or temple together. In others, Grandma will play the piano while everyone else sings along. And in still others, it’s virtually guaranteed that everyone will get their year’s-worth of invaluable “wisdom” from that one goofy brother-in-law.

Celebrating with relatives is a wonderful thing, but especially this time of year, we must all be more conscious of the unrelenting human desire to compare ourselves and our decisions to those of the people around us. Continue reading “This Holiday Season, Ignore the Relatives”

Some Positive Economic News For Your Halloween Night!

Fear is such a powerful emotion that we have a global holiday for it. While the origins of Halloween have a much more interesting history than the commercialized version we are now familiar with, our streets and homes will be filled with little ghosts and goblins tonight, or in my case, a witch, a pirate and a gorilla.

Amid the recent market movements, political campaign season midslinging, and general doom and gloom media reporting, there are a large number of positive economic stories unfolding right before our eyes.

One leading candidate for the “most under-reported story” of 2014 is the remarkable drop in the U.S. government’s budget shortfall.  The final numbers announced by the U.S. Treasury for fiscal 2014 (ending September 30) shows a $483 billion deficit. That’s about $1 trillion lower than the record $1.4 trillion deficit recorded in 2009. As a percentage of the U.S. Gross Domestic Product, the deficit came in at 2.8%–a percentage that falls squarely below the average of the last 40 years!   Continue reading “Some Positive Economic News For Your Halloween Night!”

The Return of Volatility

Our current seasonal transition from summer into fall feels almost symbolic of the current trend in financial markets from tranquil to volatile, as global news made for some interesting headlines throughout the summer. New threats of war, the emergence of Ebola, slow economic growth abroad, and the end of QE have brought pause to the US market advance. After such a long period of rising markets, many have forgotten that markets do retreat from time to time as well.

2014 Minnesota Renaissance Festival

2014 Minnesota Renaissance Festival

On a personal level, the fall is my favorite season of the year. The summer heat gives way to changing temperatures, resulting in immaculate fall colors in this part of the country, free for anyone to enjoy as long as they take the time to step outside and look around. The cooler temperatures and earlier sunsets create a more optimal setting for throwing on a sweatshirt and sitting around a bonfire with neighbors and family members. Apple orchards, pumpkin patches and hay rides abound, providing an excellent source of outdoor family fun. Opportunities abound as long as you are ready for them and know where to look. My son and I even had an opportunity to ride an elephant last month at the Minnesota Renaissance Festival! Continue reading “The Return of Volatility”

Approximately Right vs. Precisely Wrong in Financial Planning

Photo Credit: ThinkStock

The second president of the United States, John Adams, made a prediction years ago in a letter to his wife:

“The second day of July, 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival…It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bonfires and illuminations, from one end of this continent to the other, from this time forward forever more.”

Make no mistake about it, John Adams painted an incredibly accurate picture of what was to come! This coming month, a mere 238 years later, our nation will celebrate its great anniversary festival by hosting parties, parades and fireworks with our neighbors, family and friends. But focusing too heavily on the details, however, one could also argue that John Adams was wrong. After all, we celebrate our nation’s independence on the fourth of July, not the second!

In hindsight, it seems ridiculous to claim that Adams was incorrect. In the moment, however, it is easy to get distracted by minutia that has little relevance to our financial well-being. We easily become critical of ourselves and envious of others, resulting in us completely missing the big picture.

Continue reading “Approximately Right vs. Precisely Wrong in Financial Planning”