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How Bonds Diversify Stocks & How It’s Like Team Golf – Finger Financial Five #100

Jeremy Finger
Jeremy Finger
Table of Contents

“Success in golf depends less on the strength of the body and more on the strength of the mind and character.” – Arnold Palmer

The same goes for investing.

Many people use bonds to offset the volatility of stocks. Bonds have typically been a great diversifier for stocks. 

This is very similar to playing team golf. Let me explain…

I played in the Member-Member Golf Tournament at the Dunes Golf and Beach Club last weekend. My partner and I play our own ball and get shots relative to our own individual golf handicap. 

Our lowest net score gets counted on each hole. Meaning that if I had a bad hole and my partner had a good hole, we used his score. Similar to bonds typically offsetting down years in stocks and vice versa. 

Sometimes we have a bad hole together. I hit my ball in the water on #13 and my partner missed the green and three-putted. Our best score was not good on that hole.  

Financially speaking, this is what has happened so far in 2022: both bonds and stocks are down. See below:

We need to think of financial “bad holes” just like golf. Grind it out. Play smart. Play within yourself. Work together as a team to keep the losses minimal and look for opportunities. While others may throw clubs and quit on bad holes, remain calm and focus on the next best step.

  • We won’t play well on every hole. We also won’t play badly on every hole either.
  • Enjoy the people you are with regardless of the score.
  • We don’t know how many holes we have left to play. Enjoy each as much as you can.
  • When you have a bad hole, your partner can pick up you. Next hole it may be your turn to do the same.
  • A score has no determination on the quality of your round. Only you do. 

Let us know if you have any questions. Email me at [email protected] or call 843-970-1049

Happy to help in any way we can. 

On the lighter side, we finished the final day at -4 par for a total of -11 over two days. We won our flight. It was not pretty, but we got it done. 

Hope all is well with you and your family,

Jeremy

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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