Diamond In Your Portfolio: What Baseball Teaches Us About Investment Decisions

by Jeffery A. Keill, CFP, CIM, FMA, FCSI, CEA

With the Blue Jays now in the hunt for not only the American League Championship, they are also looking to become the World Series Champions. Once again  this got me thinking about investors and investing. Can stepping onto the baseball diamond teach us anything about making decisions in the investment arena? Well having spent most of my childhood and adult life playing horribly and watching intently I believe there are some insights. The world of baseball and the world of investing seem leagues apart, but a closer look reveals surprising parallels to how we make decisions with our money.

The Investment Batting Average

In baseball, a batting average is a statistic that measures a player’s success at the plate. It’s calculated by dividing the number of hits by the number of official at-bats. For example, a .300 average means the batter gets a hit three times out of ten. In 2025 the top 50 batters in the whole league produced a .296 Batting Average. That is to say, they achieved hitting success almost 3 out of 10 times. Inversely, they failed 7 out of 10. These are the top professional batters in the world.

Just like plate appearances to get those at-bats, investment decisions are not about being right every time. We cannot predict with certainty how an investment will preform on any given day, week, month or even year. There is  uncertainty of outcome that is beyond our control or even the most well-researched decisions can sometimes “strike-out”. The key to investment success, much like baseball success, is to focus on the probabilities over time and not in the moment.

Learning from the Losses

Every baseball player deals with strike outs, pop flies, and slumps. Baseball can be streaky, as they say. Managers, owners, and players don’t simply quit after a bad game. Professionals look at what happened, analyze it, learn from it, and step up to the plate again knowing it is about averages not about success in every game. There are 162 MLB baseball games in a season. The best teams in the league, although striving to win every game, know that success comes at about 90 to 95 wins. This means having a win rate of .580 or 5.8 out of 10. Investors should think of investing success the same way. Wins and Losses are inevitable.

Its About the Line Up

People love the excitement of home runs and timely big hits. These are certainly what keeps the fans on the edge of their seat, but baseball wins come from the redundant plays that must occur. Errors can be costly. Routine plays like simple fly ball catches, slow ground out plays, and easy singles make up the majority of plays but stringing these together successfully over time leads to success. Investors love to see huge swings (pun intended) in their portfolios as they appreciate during dynamic bull markets, but what leads to most investment success is the consistent dividend and interest payments.

The fact that you have solid defensive holdings in your portfolio that compliment the big hitters. You see, building a portfolio of investments is much like a baseball manager putting together the line up. You cannot just have 9 home run hitters in each. They tend to strike out most often and provide generally poorer defense versus other players who specialize in the redundancy we need to see consistently. As a matter of fact, during 2025 the strike out rate for the top 50 batters in Major League Baseball was near 20%. This means that 1 out of every 5 plate appearances, they simply return to the bench with anger and shame.

Managing Emotions: Don’t Swing at Every Pitch

The top MLB batters are disciplined. They don’t swing wildly at every pitch, just as successful investors don’t chase every hot tip or market trend. Patience, discipline, and a cool head are crucial in both baseball and with investing. Ignore the noise of the crowd, wait for your pitch, take calculated swings, and doing so will improve your investment average over the long run. Good baseball  managers, like good portfolio managers know that not every player is going to be successful every game. Strike outs and errors in field will occur from time to time. The manager’s job is to ensure success,  to get the right players in the right spots during each game and aggregately over the entire season.

Conclusion- Focus on Process, Not Just Results

A batter’s average is the result of solid fundamentals: stance, grip, focus, and timing. A Team’s success is the result of wise manager decisions that put the Team in the best position over the long season. Similarly, investors should emphasize a sound process like solid research and efficient diversification, over the pursuit of a single “home run” that would win every game.

I hope this baseball analogy reminds us that it is not about getting it right every time, but rather about playing the averages, learning from experience, and just staying in the game. If you find yourself second guessing an investment, just keep in mind that even the greats strike out and the best teams lose on the way to win the World Series.

Go Jays Go!

Posted October 14, 2025