FPFA Monthly Insights – Your Portfolio as Golf Clubs? Yes. (August 2026)

The past two months, Geoff gave me the opportunity to evaluate the list of preferred funds we use across our clients’ portfolios. It was a great exercise to learn about our core strategies and individual investment selection. One of my biggest takeaways was how various asset classes come together to build a strong, diverse portfolio. 

While Geoff has had an article brewing in his head about how building a portfolio is like managing a garden (1st year it sleeps, 2nd year it creeps, 3rd year it leaps), I won the coin toss for this month’s newsletter so we will go with my analogy --- golf.  I love golf and while that little white ball can give me fits, it beats weeding.

I think asset classes are like golf clubs. You use different clubs for certain situations in golf, which is exactly how we construct diverse portfolios with various asset classes to combat scenarios the market can throw at us. I thought it would be fun to use the analogy of comparing asset classes to golf clubs through the lens of power, control, and risk.

Driver: Large Cap Growth Funds

Big swing, high conviction, and more volatility. Large Cap Growth funds are comprised of companies seeking aggressive future growth, have high expectations, and experience big swings. Like a driver, the goal is maximum distance, but it is the club that often generates the biggest misses. A growth stock shares similar characteristics; it is great for long-term growth, but you should expect a higher beta (volatility) with these funds.

Fairway Woods: Large Cap Value Funds

Solid growth, with some income. While in the same family as the driver, fairway woods offer less risk with slightly shorter distance and more control. Large Cap Value funds target a similar objective: invest in mature, established companies to generate steady income (“distance” of consistent payoffs), with less volatility than growth funds. You’re not swinging for the most distance, but you are still making solid progress down the fairway.

Long Irons: Mid/Small Cap Funds

High upside, but less consistent. Long irons act in this way as they aren’t used very often due to their low margin for error with a thin sweet spot. Mid/Small Cap funds carry the same risk profile: if you hit one well, the growth potential is there; if you shank it, you can expect a steep downturn.

Mid Irons: Index Funds

Mid-irons are the “go-to” club in most people’s bag because they are predictable.  You can count on them to be dependable in a wide range of situations because of their consistency and low variance in outcome. This is essentially the theme of an index fund: low cost, not complex and what we term ‘benchmark hugging’ meaning they are designed to move in step with whatever index they are tracking (e.g. large cap, small cap, international, etc.). They may not be the flashiest clubs, but you can rely on them as a “default.”  FPFA utilizes index funds for these reasons, but in an actively managed framework.  In other words, we are typically marching down the fairway managing our core strategies by actively rebalancing and strategizing index funds.

Wedges: Bonds

Short, smooth, and precise shots. You're not trying to hit it far, instead you want predictability and take the big misses out of the equation. Wedges give you consistency and a soft landing, similar to how bonds provide steadier, more predictable income and cushion the volatility elsewhere in the bag. They are not the most exciting, but they can really save your portfolio during a rough market. 

Hybrids: Balanced and Allocation Funds

The best of both worlds. Hybrids blend two clubs together just like balanced or multi-asset funds blend differing asset classes together.  A classic hybrid club combining a fairway wood and an iron is similar to two equity funds being combined in a ‘go anywhere’ mandate for the asset manager (e.g. all cap US equity or a US and international combination). The multi-asset fund can be akin to a hybrid club combining the easy launch and forgiveness of fairway wood with the controllable shaft of an iron. 

The most popular hybrids though are balanced funds combining stocks and bonds.  These funds blend the growth-oriented and volatile nature of stocks with bonds that lack growth potential but serve as a ballast against risk. By blending them together it can capture some of the upside for less of the downside. 

Lob Wedge: Alternatives

Lob wedges are used in special situations when you don’t trust normal clubs to do the job well. Alternatives (e.g. real estate, commodities, private investments, unique strategies such as long/short and option writing) play a similar role as they are not used frequently but are valuable in specific scenarios. When you have a tight lie, hard angles and not a lot of green to work with, an alternative can provide a soft bounce in a turbulent market. 

Putter: Cash Equivalents/Money Market Funds

Lowest power, highest precision, and the club you lean on to protect your position. Cash equivalents and money markets work the same way by focusing on capital preservation and liquidity instead of growth. Comparable to shifting your portfolio from stocks to more cash when you are closer to retirement, you use it to protect what you've already gained and finish the hole safely. 

Building a portfolio is like assembling a golf bag…

What can golf clubs tell us about portfolio construction? Let’s imagine you are going to play a round of golf tomorrow. If you only carry a driver, you could hit it far but wouldn’t be equipped for shots close to the hole. If you only carry a putter, you probably wouldn’t hit it out of bounds, but you would never reach the green. To set yourself up for success, you need different clubs. Investing works in a very similar way. Strong portfolios are diverse and combine the different asset allocations for growth (stocks), stability (bonds), and liquidity (cash) with occasional specialized investments (alternatives). A good golfer doesn’t hit their driver on every hole, just like a great investor doesn’t put all their money in the highest returning asset class. 

Here at FPFA, we recognize that we can’t make a hole in one on every hole. However, we do take a thoughtful approach of using the right tool for the situation, managing risk, and playing the long game. If you are curious about your portfolio, please reach out to Geoff or myself..