For those of you that watched the US Open, you saw a few golfers (Ricky Fowler in particular) that were trying to implement swing changes during the tournament. In the case of Ricky Fowler, his desire is to become more consistent.
The difficulty is in implementing the swing changes under pressure. I'm sure Fowler would say he hits the ball just the way he wants to on the driving range. The added pressure of the tournament causes him to fall back into his old habits and hit an errant shot.
This is very similar to investor behavior under pressure. Jason Zweig of the WSJ highlight's this in a recent article titled, "Can you Handle the Market's Stress Test?" Zweig discusses what happens to investors under stress below:
They (Investors) are also likely to fall back on emotional—or what Prof. Delgado calls “habit-based”—decisions. “Stress tends to exacerbate your typical biases,” he says. “If you usually make conservative choices, it will make you more conservative.” And if you typically make risky choices to avoid locking in losses, he says, stress “will make you more risk-seeking.”* Other researchers have found similar patterns of behavior.
Under pressure our deeply ingrained habits tend to come to the forefront despite our best intentions. Whether it's golf or investing, how we function under pressure can dramatically impact our results.
Ricky Fowler uses a swing coach to help him get through these pressure periods. One of the most important things that an advisor can do for clients is to help them stay with their plan and asset allocation during these high stress periods. Preventing clients from exacerbating their typical biases may be the most important part of helping them achieve their goals.
*Bold Emphasis is mine