October 2005: What Does It Take to Succeed?

WHAT DOES IT TAKE TO SUCCEED?

Many people mistakenly think that being the best at something means you need to be the very best at it all of the time. That is simply not true. Being the best at something does not require being the very best at it all of the time, or even most of the time.

Lance Armstrong is living proof of this. Lance is widely acclaimed as the best bicyclist of our time. We agree. After all, he’s won the Tour de France (the Super Bowl of bicycle racing) seven years in a row. But, did you know that he is rarely the fastest rider when he races? So, how did he win seven years in a row?

The Tour de France is held over a period of about three weeks and consists of 21 different races called “stages” in the parlance of cyclists. The stages in this year’s Tour varied in length from 12 to 149 miles, with a combined distance of 2,242 miles. The winner of the Tour is the contestant that posts the lowest cumulative time overall.

Of the 21 stages, how many times do you think the world’s best bicyclist came in first? Just once. That’s right, Lance Armstrong finished first in only one of the 21 stages. In fact, in half of the 21 stages his individual performance was not in the top 20, yet he still came out the overall winner.

"You don’t need to own the hottest, highest return investments to achieve superior long term investment results. Consistency and endurance in achieving above average investment results will do the job."

CONSISTENCY & ENDURANCE

Lance Armstrong didn't need to place first every time, or even most of the time. The key to Lance Armstrong’s success was consistently being above average.

The second essential key to Lance Armstrong "being the best" was endurance - he stayed in the contest and finished! Only 155 of 209 contestants were able to complete the event. For the 54 riders that didn’t finish, it didn’t matter how fast they cycled or how many stages they won if they couldn’t go the full distance.

THE WINNING COMBINATION

Consistency and endurance are also a winning combination for investment success. The “how to” part of this equation is embraced by the guidelines of Asset Allocation Advisors’ investment strategy — balance, diversification, moderation, and patience.

You don’t need to come in first all of the time, or even most of the time to be a successful investor. You also don’t need to own the hottest, highest return investments to achieve superior long term investment results. Consistency and endurance in achieving above average investment results will do the job.

Staying the course is also a requirement for being in the winner’s circle. You can’t reach your goals if you don’t keep pedaling. It can be tempting at times to sit it out for a while when the going gets rough, but usually the scariest times as an investor are followed by the most rewarding of times. Staying in the contest is the safest way to take full advantage of the rewards bestowed upon investors that persevere and stay in the hunt.

SETBACKS ARE NOT FAILURES

Setbacks are an inescapable part of the journey whether it’s cycling, investing, or life in general. That’s just the way it works. Lance has had his share of setbacks on and off the road, yet his resolve could not be shaken because setbacks are only setbacks, they are not failures. As investors, we have experienced setbacks in the past, and we can realistically anticipate there will be more setbacks in the future. However, our investment strategy is designed to endure and triumph over these inevitable episodes.

NO PEAKS, NO VALLEYS

Our investment objective is not the achievement of a higher return than everyone else in any given quarter or year. Why? Because any time an investor reaches out for the peaks of performance they also become vulnerable to experiencing the valleys of performance. We don’t want that. Instead, we prefer an investment path of moderation, choosing a portfolio of mutual fund investments that, in aggregate, offer what we believe is a strong likelihood of being consistently above average.

Like Lance, we want to come out on the top of the pack over the long haul by consistently achieving above average performance and having the staying power that will keep us going for the distance. We believe the investment strategy we utilize on your behalf is a logical and reasonable way to do this and will favor the achievement of our objectives of profits and protection of capital.

THANK YOU

We are appreciative and grateful for the trust and confidence you have placed in us by allowing us to manage your portfolio. As your financial advisors we are also available to speak with you about any financially related question, topic or concern. Please call us with your questions, big or small, and let us help you. We want to help make your life a little simpler and easier. Thank you. ***

Greg Schultz & Bruce Grenke
© 2005 Asset Allocation Advisors, Inc.