Kids Baseball and Investing

May 07, 2021

What Kids Baseball Teaches Me About Investing:
I watched my eight-year-old grandson’s baseball game last night. All the kids had on a game face and were focused during the first few innings. They then scored several runs and began building a comfortable lead. Laughter and celebration ensued, and rightfully so. But…
The game was not over. They took the field on defense with laughter and a relaxed attitude, and the game face was replaced with big smiles.  The smiles quickly faded as the other team scored, and then scored again—and again. Mistakes were made, and then the other team scored yet again. Smiles were replaced by shock and fear; the initial high of playing the game well was slipping away.
They held out and won in the end, but just barely.
I can draw a useful comparison to investing here. Success can easily move into complacency, and when gains start to slip, fear can move in. If and when fear takes hold, mistakes are more probable.
In my view, it is better to keep focus, keep the game face on while investing—and not to be moved by the score.