chess pieces

A neighborhood teenager challenged me to a chess game since he knows I’m an enthusiast. He’s known as a talented player, and I accepted. I decided that my approach to winning the game would be the same one that I use for my investments… and it paid off handsomely.

Young chess player versus mature investor

My young opponent knew many winning strategies and tactics, but he didn’t have the patience to implement them. This is like many inexperienced investors who don’t have the perseverance to maintain their initial plan during periods of market volatility. New investors are more likely to sell out during a market crash than veteran investors. All the book knowledge in the world is useless if an investor lacks the patience and stamina to follow through.

New or “tried and true”?

From time to time, someone comes up with a novel idea, bucks the trend, and makes millions. These fortunate few “whiz kids” may confuse their good luck for genius. There’s nothing wrong with trying something new. In fact, too many people fear the unknown, never experiment, and simply miss out on great opportunities. However, for most folks, most of the time, it pays to follow… and really stick to… the fundamentals of investing and of chess.

How I won

The way I beat my chess opponent was that I stuck firmly to my winning strategy. When I had a slight advantage by having more pieces, I was happy to trade pieces with him in order to maintain my advantage. His error was that he thought he should try something new instead of sticking with the “tried and true” approach.

Even if you don’t play chess, you can see how sticking to the fundamentals can greatly increase your odds of success. If you want to learn about strategic investing, read the book that I wrote with world chess champion Susan Polgar, Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing (available on Amazon and in Israel at Pomerantz bookstore, 02-623-5559).

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Published August 13, 2020.

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