I must say, the Celtics’ recent postseason was their most disappointing in years. Ok, yes, and I can also say that I’m grateful for everything that transpired in the 2024 postseason; two things can be true at once! I’m not alone in this sentiment: a 64-win regular season followed by a complete unraveling in the playoffs left me and other fans and analysts scratching our heads. Was it overconfidence? Hubris? Or simply an inability to adapt when it mattered most?
Whatever the cause, one thing is clear: Boston leaned too hard on a one-dimensional strategy. Mazulla-ball, relying heavily on the three-point shot, works beautifully over the course of an 82-game season. The math, over time, checks out. But the postseason is a different beast. The standard deviation that evens out in the long run becomes brutally punishing in a short 7-game series when the other team exposes weaknesses. When the threes didn’t fall, there was no reliable backup plan. No post presence, no mid-range game, no second or third scoring options to carry the weight. If you’re a reader of my family financial planning articles, this should sound familiar.
Mazulla Ball or Too Much Reliance on a One-Bucket Strategy
Many investors make the same mistake. When the stock market’s hot, it’s easy to feel overconfident, especially after a 20% return year. But just like the regular season doesn’t guarantee playoff success, a strong year in the market doesn’t mean it’s repeatable, especially when you’re nearing the retirement “playoffs.” This is where my retirement planning three-bucket strategy comes in.
If you’re in your early 20s, you can afford to live by the three. Stocks are your three-pointers; volatile in the short term, but they tend to outperform over long stretches. You’ve got time to let the math work out (aka, the whole season), but once you hit the retirement red zone, within 5 to 10 years of retirement (the beginning of the postseason), you need a more well-rounded game plan; this is the phase where adaptability matters most. Throwing good money after bad, hoping for a rebound, can result in significant losses.
Diversification doesn’t just mean owning a lot of stocks. It means structuring your assets intentionally: a Cash Bucket for short-term needs, an Income Bucket for steady mid-term support, and a Growth Bucket for long-term investments.
The Celtics of last year had a balanced team; they had wonderful portfolio diversification. If the threes weren’t falling, Brown drove to the hoop, Tatum took mid-range looks, and the bench could contribute. This year? Nothing. The roster didn’t really change, but the execution and adaptability did, even when some players were noticeably underperforming or playing sick (The Zingus Unicorn) being the most obvious example here.
In investing, as in basketball, a single strategy can carry you far, until it doesn’t. Game 31 of the regular season is not the same as Game 2 of the conference finals. And being all-in on one asset class or one approach leaves you exposed when things get tight.
The Importance of A Balanced Retirement Portfolio
A balanced portfolio is like having multiple scoring options. It’s the difference between weathering a slump and getting knocked out of contention, way before you expect to be. So, let’s take a cue from the Celtics’ surprise misstep. Don’t wait until the postseason to realize you need a second option. Build a better plan now, one that’s built to win no matter what the market throws at you.
Whether it’s to lament about the Celtics and talk about the three-bucket strategy, please book a call; my door is always open.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
