No one is an Asian or European or African when all our continents unite for one month and fight for World Cup Title in Soccer (We call it Football). The Soccer World cup in Russia has kicked off and really a treat for sports-loving followers. And, here I am who love personal finance too, mixing these two. Yes if you feel this greatest football event, it has many learnings for us too. So here are some – Investing Lessons from Soccer.
Do you know Russian Media has decided not to publish any “negative news” during this world cup? So high are the stakes for a country organizing it. For teams also, it’s a matter of national pride. The fans will not forgive or forget the moments.
For an investor & football fan, there are many investing lessons that soccer provides. Here are some points I would like to put before you:
Investing Lessons from Soccer World Cup
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A Balanced Team
The balanced football team is one who has talented players covering all aspect of the game. They have defenders, mid-fielders, and strikers. The work is divided. Few players are move makers and few score goals for the team. Few just move to defend the opponent’s moves.
In Investments also, you have strikers (Equity), Defenders (Debt) & Mid-fielders (like Balanced Funds or Gold). A winning portfolio is which balanced the team (risk).
Very seldom in football, we see a defender scoring goal, but they are equally important to defend moves made by the opponent team. In investment also, the debt may or may not beat inflation, but its presence helps in managing risk, liquidity & rebalancing of the portfolio.
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Player Characteristics
Football is more popular at club levels. Many of these players play with each other at club levels, but for the world cup, they play against each other. This because they play for their national teams and honor the national duty. No one is a star when it comes to playing for the nation. They equally sweat with other players knowing that nation is expecting from them.
In investments, it is important to have goals or reason to invest in front of you. Vague, directionless investing takes out the seriousness. This is one of the major reason, people commit mistakes as psychologically a little is at stake. Many think tax saving is investments or bank FD can help them fulfill retirement needs in long-term. Goals ensure a formal approach.
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Selection
The football teams prepare for this event for years. They search the best talents both in the field & of the field. Even the masseuse or cook is very important. Key positions like Coach or midfielders are selected with great precision and they play a lot of conditioning matches.
In investments also, Advisor engaged with you should be selected very carefully. One must strive for a person of integrity & knowledge for your investment journey. The advisor helps you scoring penalties in investments. He helps you choose the best team and during match, he helps you identify the best mix. He is on sidelines but never seated. He is actually in everything that you are facing.
Another investing lessons is that it is also very important to select the right amount of different assets. The asset allocation is the most important thing. Then comes the individual securities. You must have a correct process.
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The offside trap
Everyone is eager to score early or make the first move. But football is a game with referee watching the moves. He can award free kicks or transfer the ball possession. He can penalize for violation. One can be out if he is violating the spirit of the game.
In investments, we also want immediate results. We see past performance only and expects same to replicate every year. We churn portfolios when a small wind arrives. We follow herd mentality and often invest in dumb schemes. We are in a hurry to be successful.
Well, soccer is an interesting game and I am sure there are more Investing Lessons.
So I leave it here with this thought. Please do let me know what you think in the comments section below.
Do share this article with your family & friends who are soccer fans.
