I'm an Investment Adviser: Why Playing Defense Can Win the Investing Game

Chasing large returns through gold and other alternative investments might be thrilling, but playing defensive 'small ball' with your investments can be a winning formula.

By George Pikounis, Certified Estate Planner (CEP®)

published 17 July 2025

in Features

A baseball catcher dives to tag a player trying to score. — (Image credit: Getty Images)

I love watching sports and analyzing the strategy behind each play. The idea of finding the formula for a winning team fascinates me. One such formula is: "Defense wins championships."

In baseball, for example, the "small ball" strategy involves good pitching and defense that lead to fewer runs allowed, making it easier to secure a victory. This philosophy is my personal favorite and applies not just to sports but also to investment strategies.

Recently, investors have been on the offensive. Following the presidential election and the introduction of tariffs, they've been racing to find alternative investments that provide larger, more stable returns than the rocky stock market.

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The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

Gold and cryptocurrency prices have soared to record highs as a result.

But when investors chase the largest returns through alternatives, they often overlook these key defensive strategies: managing emotion, diversification and liquidity.

Managing emotion

As the Dow Jones index, S&P 500 and Nasdaq collectively lost more than $6.4 trillion on April 3 and April 4, retirees and pre-retirees were understandably nervous.

Risk tolerance usually decreases with age: People can't afford to lose the hard-earned retirement money they spent their whole life saving.

Gold is viewed as a safe investment in times of volatility, and many investors shifted their portfolios to gold in search of stability. But reacting with emotion was not the answer.

While those who invested in gold in April found consistency, they also missed out on the stock market's rebound. From April 4 through May 31, the markets recouped their losses and had larger returns than gold.

It's usually not a good idea to sell when the market is down. Investing is about time in the market, and reacting based on emotion can risk missing out on market rebounds.

Considering the adage of "buy low, sell high," early April's crash may have been a time to consider investing more money in the stock market, not less.

Diversification

While some have enjoyed short-term growth of alternatives like gold, real estate and cryptocurrency, those investments are far from flawed.

Historically, both gold and real estate investments have been outperformed by the stock market, while cryptocurrency is inherently volatile. Bitcoin reached a high of $100,000 and a low of $79,000 just this year.

There are benefits to each asset, like the stable growth of gold and real estate and the large recent returns from cryptocurrency, but investing too heavily in any one asset class leaves you susceptible to large market losses.

Diversification can help balance growth while helping to protect money from market risk.

Liquidity

Liquidity is important in the investment world and should be considered when buying alternatives. You may have $1 million in investments, but if one of my clients had $900,000 of that tied up in assets that weren't liquid, that would concern me.

For example, real estate takes time and money to sell for a profit. If you plan to own a property and rent it out, you have to maintain the property. It's more complicated than stocks, and the value can't be easily accessed in emergencies.

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As people near retirement age, they need to have a larger portion of their money easily accessible. The classic investment strategy recommends a 60/40 portfolio, with 60% of investments in liquid stocks and 40% in bonds, annuities or alternative investments.

While this doesn't necessarily apply to everyone's investment strategies, it's a good starting point to build from.

The 'small ball' investment strategy

This is not to tell you to avoid alternative investments altogether. As we've seen in the past year, they can be valuable assets to have. But we need to avoid having our judgment clouded by growth and look at the bigger picture.

Thinking back to our "defense wins championships" philosophy, if we don't need 20% in returns to accomplish retirement goals, then pursuing that growth leaves us susceptible to more risk than necessary.

Playing it safe and using small ball in our investment strategy can be a winning formula.

If you're unsure about investing, work with a financial adviser to help you formulate a strategy and execute it, so you can enjoy retirement and let the pros worry about the rest.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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George Pikounis is an Investment Adviser Representative for Burns Estate Planning in Tallahassee, Fla. With over a decade of experience in the financial services industry, he uses his background to help clients understand how each financial decision impacts their overall portfolio. As a Certified Estate Planner (CEP®), George is particularly passionate about guiding his clients in creating and preserving generational wealth.