Investors have a disparate standard for winning than the New York Yankees.
Creating wealth is all about consistency, not championships.
The Yankees, on the other hand, have defined a successful season as winning it all; nothing less will do.
This edict rings hollow since their last championship was in 2009. Delusion runs rampant in the Bronx.
This point brings us to their beleaguered manager, Aaron Boone. Since taking over the team, his record is 697-497, for a .584 winning percentage. This record equates to an average of 95 wins per year.
Why is Aaron Boone a human punching bag on the Yankees’ social media?
The answer lies below the surface regarding their playoff performance—22 wins vs. 23 losses, a very pedestrian .489 winning percentage.
It gets worse.
The team’s record against teams with a better regular-season record than the Yanks is abysmal.
The Yankees beat whom they’re supposed to (A $300 million payroll helps), but fail miserably against top competition.
Hence, the fan’s vitriol toward a record that most other teams’ supporters would die for.
Investors have an easier go than the beleaguered Yankees skipper.
In baseball, if you don’t win the World Series, nobody remembers you. Building wealth is the antithesis of this attitude.
Creating wealth isn’t about All-Star seasons. It comes from decades of average returns.
For example, using the rule of 72, investors double their money every decade with a boring 7% annual return. Aaron Boone’s regular-season return is Warren Buffett-like in the world of investing. Your portfolio doesn’t crave World Series victories. Steady performance does the trick.
For investors, avoiding disastrous last-place finishes outweighs fantastic regular-season records. Dodging losing streaks is paramount to being remembered by fans as Champs.
Time is the real MVP of investing, not Giancarlo Stanton’s 500-foot home run blasts. Baseball teams play a 162-game season. Investors face a prodigious marathon of thousands of trading days over their lifetimes.
Staying in the game long enough for compounding to do its magic is vastly more vital than dominating opponents.
Yankee fans can be very spoiled and entitled. I plead guilty on both accounts.
Aaron Boone’s teams almost always are playing meaningful baseball in the fall. It’s not easy to win a championship, but having the opportunity to do so every season should count for something.
There’s a lesson here for investors.
Aiming to always be in the game with monthly contributions to your accounts, along with sticking to your plan no matter what fickle markets throw in your face, is all that matters.
It’s not necessary to be the champion of Wall Street. In fact, there’s no such animal.
Qualifying for the playoffs of compounding should always be your primary goal.
Don’t let the bleacher creatures distract you from your quest.
Aaron Boone is judged very differently from the average investor. An investor’s time frame isn’t a 162-game baseball season. Take advantage of celebrating mediocrity and understanding how to read the investing scoreboard that matters.
