Oak Hill

Past performance does not guarantee future results.

The above is a key statement when looking at past winners of the PGA Championship. To say that we should expect the unexpected when it comes to this tournament is an understatement.

This year’s PGA Championship will be held at Oak Hill Country Club in Rochester, NY. When looking at past winners when the PGA has been held at Oak Hill we see the unpredictability of this tournament.

In 1980 Jack Nicklaus won by six shots in a dominating performance. Nicklaus was of course one of the best golfers of that time and this result certainly was not a surprise.

In 2003 Shaun Micheel pulled a major upset in winning the PGA. Micheel entered the tournament as the 169th ranked golfer in the world and that win would represent his only career victory on the PGA Tour.

In 2013 Jason Dufner won his first and only career major at Oak Hill. Dufner was far from an elite name but someone in the middle of the pack who had an exceptional week including shooting a 63 during the second round which tied a then record for the lowest scoring round in a major.

These three past winners came from very differing spectrums. One was a superstar. One was a true longshot who would have literally his one and only career moment at Oak Hill. And the other was a middle of the road player who got hot at just the right time.

Of course plenty of superstars have gone on to hoist the Wanamaker Trophy. Recent years have seen Tiger Woods, Rory McIlroy, Justin Thomas and Brooks Koepka all win the PGA Championship.

But there have also been quite a few longshots in the history of the PGA Championship who have come from seemingly nowhere to win one of golf’s most prestigious events.

For example who can ever forget in 1991 when John Daly won at Crooked Stick? He was the last alternate that year who found out the morning of the tournament that he’d be in the field. With no practice rounds he just went out and dominated a field that included many superstar golfers of the era.

In 2009 relative unknown Yang Yong-eun outdueled Tiger Woods on Sunday to win his first and only major.

Sometimes the cream rises to the top at the PGA Championship and other times we see outcomes that could not have realistically been forecast by any experts.

Past performance does not guarantee future results.

This statement is also very key in the world of investing. How many of us when selecting mutual funds to invest have looked quickly at the options on a fund’s website and sorted by recent performance to select where put our money? Many of us have done this at some point and probably felt pretty good about the choices we selected in that brief five minutes of research.

But did you make sound choices? There could be major underlying reasons why some funds performed better than others in recent years. Maybe they were invested in a hot sector. Maybe that particular market cap (large, mid or small) was running well for whatever reason. Or maybe the funds simply got just a little bit lucky.

This is where the expertise of a seasoned financial advisor is needed. Instead of looking at just recent performance financial advisors are trained to looked at underlying results. And just as importantly financial advisors can try to look forward to temper expectations as well as help manage risk. That hot mutual fund today for example maybe is due for a little regression down the road.

Here is a recent example of how recency bias can hurt our financial mindset. During Covid in 2020 long term bond funds performed exceptionally well while the stock market was falling. Why? One underlying reason was the dramatic rate cuts the Fed was implementing in response to the pandemic.

Could this have been realistically forecast a year earlier? No. But many people saw the performances of these funds during Covid and blindly shifted their assets out of market based funds into these long term bond funds.

What was the end result? Well with the Fed pumping so liquidity into the system in the short term the market rallied and longer term bonds looked much less attractive. Down the road when the Fed signaled rate increases were coming these funds began to take a negative hit. As rate increases continued at a higher rate than the market initially expected these funds continued to see downside pressure.

This is one example where running hot for one time frame does not necessarily make it a sound investment going forward. Sometimes the unpredictable happens and well some funds just get lucky in their performance. Talking with a financial advisor can help put a lot of these things into perspective and help guide you to making more sound decisions with your financial planning.

There is going to be a lot of excitement in Rochester for the PGA Championship in 2023. It is a star studded field and we should see plenty of fireworks from the world’s best. Being a Western New York based financial services firm our we will be pulling for Rochester New York’s own Alex Smalley to hoist the coveted Wanamaker Trophy at this year’s PGA Championship.