PHOENIX, AZ -- (Marketwire) -- 01/30/13 -- Sports provide a microcosm of life and the biases that inevitably enter into our daily routines and decision making process. Perhaps no sport defines this reality more than golf.

Much like financial markets and planning, golf is a sport that places a premium on risk and reward decisions amongst a backdrop of ever changing conditions and outlooks. The professional golfer enters each round with a strategy for navigating through the course. This plan must be tweaked and altered as their position on the course and the leaderboard changes.

Brent Schutte, Market Strategist for BMO Private Bank, offers these lessons from the world of golf to help you develop your personal financial strategy.

1) Develop a game plan -- This outline or document will provide the roadmap for your financial affairs. This plan needs to be flexible and will evolve as the years pass. Your life and market conditions will change and your plan should also. Importantly, your reference point benchmark should not be your neighbor's portfolio but rather performance relative to your goals, objectives and risk tolerance.

2) Pay attention to your scorecard (investment portfolio) -- If your portfolio is properly diversified, there is a high likelihood that at any given point some of your investments may not be keeping pace with others. Don't segregate these individual birdies (gains) and bogeys (losses) but rather focus on the aggregate scorecard (portfolio). Stay focused on the long term. In the financial world, avoiding double and triple bogeys at the overall portfolio level has its benefits. The math dictates that it is more harmful to have a 20 percent loss than 20 percent gain. Remember, a 20 percent loss requires a 25 percent gain to get back to even.

3) Accurately measure risks and the downside of a "bad swing" -- While the 16th hole at the TPC in Scottsdale has become famous, the 17th hole offers a better lesson for investors. On the tee, golfers are faced with a decision to take a seemingly riskier route and "go for" a green or lay up short of the green and attempt to hit the green with an easier second shot. Interestingly, the average score for those who took the "risky path" and went for it at last year's Phoenix Open was 3.5, versus 4.0 for those who chose to lay up and made the "safe decision." Much like the golfer standing on the tee, don't be afraid to take calculated and appropriately sized risks if you have weighed the potential costs of the downside.

4) Keep your eye on the prize and don't let emotions change your plans -- While financial plans need to be tweaked, emotions should not be the guiding force. Prospect Theory shows that in the realm of a negative domain, individuals will engage in behavior (gambles) that they otherwise would not accept. As an investor, if you have sat out most of the recent market gains following the financial collapse early this decade, don't attempt to "get it all back" by taking unreasonable risks. If you are only now looking to re-enter financial markets, consider a dollar cost averaging program over a few months.

5) Consider hiring a coach (financial advisor) -- Like a golfer looking for guidance and help through a caddie, consider hiring a financial advisor to help guide you through the ever evolving market, tax and legal environment.

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About BMO Private Bank, a part of BMO Financial Group
BMO Private Bank offers a comprehensive range of wealth management services that include investment advisory, trust, banking and financial planning to meet the financial needs of high net worth clients. Through integrated teams of experienced financial professionals, BMO Private Bank helps its clients realize their financial and lifestyle goals with solutions that are custom tailored and delivered with the highest level of personalized service.

BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.

BMO and BMO Financial Group are trade names used by Bank of Montreal.