Before becoming a Certified Financial Planner (CFP®), I had the good fortune to play professional baseball for 11 years. Having been a major league catcher, I find that there are times in my professional business practice when I instinctively reduce a problem to a sports context and develop my own solution in the same way I used to behind home plate. What I learned in the first field often applies to the second.
As an example, a classic confrontation with Hank Aaron comes to mind. I enjoyed the challenge of calling pitches against a great hitter like Hank Aaron. Me, the young defensive-minded catcher pitted against Hank Aaron, the mature master of offensive psychology. You would be right in assuming that Hank usually won the contests, but not always.
I was playing for the Houston Astros at the time. Hank Aaron comes up to bat. He takes his first swing (a big mighty swing I may add) … strike. His second swing … strike. But now, the work of a catcher begins. I knew that this would be the moment where Hank had a high probability to hit the big homer. He was smart and would anticipate the pitch - that’s one of the reasons he was so successful as a homerun hitter. The strategic move for me was to call for the same pitch that was his first strike and get him again. But then I paused. Since I was the rookie catcher and he knew it, he was probably setting me up for a big hit. I figured that Hank might assume I’d call for the same pitch as his first strike. But I didn’t. The final pitch crossed the plate untouched. I had suspected the ploy and crossed Hank up by calling for a different pitch. It was a modest and temporary victory but one that I will never forget.
I learned from this situation that strategy must be founded on psychology in order to accomplish a predetermined result. In financial planning, I am reminded of this lesson every day.
Today’s economic turmoil and volatile stock market has lead people to, at times, panic and act emotionally, not rationally. My job as a financial advisor has been, and is today, to help people navigate through their financial decisions. It is of critical importance, because the financial decisions you make are exactly where a financial plan and portfolio can be permanently derailed. Good money management is important. Good decision-making is even more important. And it is psychological just like pitch selection in baseball.
When times got especially difficult in the market, many individuals considered pulling all of their investments out of the stock market, going into bonds or maybe even putting all of their cash into a bag and storing it in the freezer or under their mattress. Prudent ideas? Well, without proper evaluation, these actions may ultimately lock in big losses that will never be gained back. The job of a CFP® is not to help you do what may be the quick and easy action, but to evaluate and determine the best decisions for you. Just like with Hank, you have to think through the psychology of the strategy.
If you feel you would like assistance with financial services and with your financial decisions, it may be time to work with a CFP®. A CFP® can help you properly evaluate strategy and the psychology behind it in order to help you make smart decisions. And It is very similar to what the catcher does for the star pitcher.
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William C. Heath, CFP® is Chairman & CEO of Barrington Financial Advisors, Inc, a Registered Investment Advisory (RIA) firm located in Houston, Texas. For more than 20 years, Bill Heath and his team at Barrington Financial have been focused on helping individuals and business owners with their financial planning and investment management needs. He has won numerous industry awards including recognition as one of Worth Magazine’s Top 250 Financial Advisors. Heath played major league baseball for the Houston Astros, Detroit Tigers, Chicago Cubs and Chicago White Sox during his 11 year professional baseball career. For more information, call 800-673-5837 or email info@barringtonfinancial.com www.BarringtonFinancial.com.