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Vail Financial Focus column: Smart investing can help meet your goals

It’s Kentucky Derby time again. Even if you’re not much of a horse-racing fan, then you might appreciate all the Derby’s pageantry — the mint juleps, the women’s beautiful hats, the singing of “My Old Kentucky Home” and so on. But if you look beyond the hoopla, then you’ll realize how much work it takes to put on such an event. And the efforts of one group in particular — the jockeys — may be able to provide you with some lessons in life — and in investing.

For starters, consider the stamina the jockeys show as they steer 1,000-pound thoroughbreds around the track at Churchill Downs. Riding a race horse is difficult, demanding and dangerous, requiring enormous endurance on the part of the jockey. And in many areas of life, you, too, will need to show some staying power. That’s certainly true when you invest.

You need the fortitude to keep on investing, in good markets and bad ones, and during all the phases of your life — even after you’ve retired. It may not be easy, but the most successful investors are usually the most persistent ones.

Here’s another trait shown by Kentucky Derby jockeys: vision. Jockeys must be able to spot the spaces they need to go through to gain the position they want. In other words, they see where they want to go. As an investor, you need this same ability.

“When they do manage to listen, they are often waiting until the other person finishes so that they can say what is on their mind. And that’s not really listening. We’re all guilty of this at some point or another; throughout time the result of this is that we seal ourselves off from other people, we don’t really know them or really understand their concerns. All because we don’t listen.”

To illustrate: What do you want your retirement to look like? Will you stay close to home and volunteer? Will you travel the world? Will you even open a small business? You need to envision your goals if you’re going to achieve them.

Strategy is also important to jockeys. They all want to win the race, but they employ different methods. For example, three-time Kentucky Derby winner Calvin Borel’s strategy usually involves riding his horse on the rail at the inside of the track — so much so that his nickname is “Bo’rail.” As an investor, you need a strategy that’s appropriate for your goals, risk tolerance and time horizon. Such a strategy will involve choosing a suitable mix of investments, reviewing your portfolio’s progress at regular intervals and making changes as necessary.

Finally, jockeys need knowledge. Is the track in good shape? How has the horse been behaving lately? What’s the weather going to be at post time? To be a good investor, you also need plenty of knowledge. You’ll need to pose some questions about individual investments you’re considering: How will this investment perform under different market environments? Will this investment fit well into my portfolio, or do I already have others similar to it? Is this an investment I can hold for the long term?

You’ll also need to learn about yourself as an investor: What is my tolerance for risk? Am I fully considering all of my goals, such as college for my kids, my own retirement and the type of legacy I’d like to leave? There’s no shortage of questions for active investors to ask — and the best investors never stop learning.

You can learn a lot from Kentucky Derby jockeys. By applying some of their skills and habits to your investment activities, you can keep moving toward your goals — and you won’t even have to run in circles.

This article was written by Edward Jones for use by local Edward Jones financial advisers. Edward Jones and its associates and financial advisors do not provide tax or legal advice. Chuck Smallwood, Bret Hooper, Tina DeWitt, Charlie Wick, Chris Murray and Kevin Brubeck are financial advisors with Edward Jones Investments. They can be reached in Edwards at 970-926-1728, in Eagle at 970-328-4959 or 970-328-0361 or in Avon at 970-688-5240.


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