That Awkward 3-Iron Moment: When Your Portfolio’s Least Favorite Club Saves Par
Every golfer has that one club gathering dust in the bag—the one we’d rather leave in the trunk but carry around because, well, I paid for it. For me, it’s the 3-iron. Too long for comfort, too short for distance, and seemingly designed to thin the ball or create divots the size of Texas.
The Club You Love to Hate
There you are, stuck behind a tree with 210 yards to the green, hazards flanking both sides, and your trusty 7-iron utterly useless for the shot. The caddy—with that knowing smirk caddies reserve for amateurs who think they know better—hands you the dreaded 3-iron.
“Not this one,” you protest. “We have a complicated relationship.”
“Trust the club you never use,” he replies. “It’s in your bag for a reason.”
Reluctantly, you set up, swing with modest expectations, and watch in disbelief as the ball sails with unexpected precision, rolling gently onto the green for a birdie opportunity. The club you have been avoiding all season suddenly turns into the hero of the round.
International Equities: The 3-Iron of Your Portfolio
This scenario mirrors what many investors experience with international equities. They sit in our portfolios like that neglected club—we include them, but we often wonder if they are just dead weight compared to our high-flying domestic stocks.
For years, U.S. markets dominated global equity performance, making international equities feel like that awkward club that never quite delivered. We checked our quarterly statements, winced at the underperformance, and wondered why we bothered.
Then market conditions change—just like finding yourself in that impossible spot on the course—and suddenly, those international equities start carrying their weight, providing returns when domestic markets falter.
Playing the Full Bag
Smart golfers know you need every club for a complete game. You might go several rounds without touching your 3-iron, but when you need it, you will be grateful it’s there. Similarly, a well-designed portfolio requires exposure to different asset classes that come into play under varying economic conditions.
Risk and reward calculations apply in both arenas. Just as golfers assess whether to lay up short of the water or go for the green, investors must weigh the potential returns of different allocations against their associated risks. The decision isn’t always about picking winners but about building a balanced approach that can handle whatever the course—or market—throws your way.
When Out-of-Favor Becomes In-Demand
Market leadership rotates just as unpredictably as golf course conditions. What works beautifully in one economic environment may struggle in another. International markets may lag for extended periods before suddenly outpacing domestic returns when global economic winds shift.
The parallels are striking—both golf and investing reward those who prepare for changing conditions rather than those who simply chase what is working now. As Howard Marks famously noted, investment success doesn’t come from “buying good things,” but rather from “buying things well” – a philosophy that applies equally to club selection on the back nine.
The Caddy’s Wisdom
A good financial advisor, like a trusted caddy, might occasionally suggest using that club (or asset class) you have been avoiding. They understand the course conditions—the economic landscape—in ways that might not be immediately obvious to you. Their job isn’t to make you comfortable in the moment but to help you score well over the full 18 holes.
Conclusion: Respect What’s in Your Bag
The next time you review your portfolio and question why you’re holding those lagging international equities, remember that awkward 3-iron moment. Every club serves a purpose, and every asset class has its day. The diversification that seems unnecessary during bull markets becomes invaluable when conditions change.
In golf, as in investing, the full bag approach isn’t just safer—it’s smarter. You never know when they’ll save your financial round and help you avoid the hazards that catch less-prepared players. After all, the most satisfying performance comes not from the clubs you love to use, but from the ones you learn to trust when it matters most.
Disclaimer: The content in this article is provided for informational purposes only and should not be relied upon as recommendations, financial planning advice, or health advice. We encourage you to seek personalized advice from qualified professionals regarding all health and personal finance matters.
