A Financial Lesson Learned in Washington Square Park

A Financial Lesson Learned in Washington Square Park

“Let’s play him,” my teenage daughter said to me this summer as we walked through New York’s Washington Square Park, where the chess sharks seek unsuspecting prey.  I negotiated the terms of the engagement with the 20-year chess veteran and then gave him a bit of a shock when my daughter sat down opposite him instead of me.

As the moves began, my daughter took full advantage of playing white, thus allowing her to set the tone for the whole event. Since she couldn’t predict her opponent’s every move, she positioned her pieces strategically. She designed her network using the best information that she had available at each turn, and she adjusted her tactics in response to her opponent’s attempts.

I often compare investing to chess because the two require a strategy in conquering the unknown. Like the opening of a chess game, a person setting up his portfolio should remember a few important chess concepts. You control when and where to invest, how much risk you should have in your portfolio, and your budget. That’s like being white in chess. You set the tone for the game, always being one move ahead of your competition. If you slip, though, and let black advance on you, you lose that critical advantage. In high-level chess games, white normally wins a little more often than black. That first-move advantage really makes a difference. So make the first move in your investments now by strategically diversifying your assets, and then regularly check how they are doing in terms of the overall market (your competition).

If you need any help with your next chess move, consult with a grandmaster, and if you need help in planning your investments, be sure to speak with a licensed financial advisor.



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