Playing the Long Game when Investing
There's nothing quite like the emotional rollercoaster of a football match. You’re cheering for your favourite team when they score that goal, or the nail-biting tension when the score hangs in the balance. But beyond the thrill of the game, there are valuable lessons that translate surprisingly well to the world of investing.
A single player's talent isn't enough to win a game. It requires a well-thought-out strategy, the resilience to bounce back from setbacks, and the ability to execute under immense pressure.
Just like in football, investing isn’t about one big play; it’s a long, strategic game where risk management, discipline, and adaptability determine the outcome. So, whether you were glued to the game or just there for the commercials, here are the key investing lessons you might have missed.
Expect the Unexpected
No team goes into the field without a thorough plan in mind. Weeks and months of analyzing different field patterns, opponent tactics, and game strategies go into winning that one game that could decide it all.
The same goes for investing; you don’t put your money in without knowing the implications that come with its growth. You can start by looking for a good trading platform and assessing their diverse range of offerings. Then, check your risk tolerance, goals, and time horizon could be far different from another person's, and market turbulence? This can be as unpredictable as that final penalty shot that would make or break the game. Recessions hit, interest rates rise, tariffs are implemented (and sometimes canceled at the last minute), and sudden market shocks can throw even the best-laid plans into chaos.
Therefore, it’s always wise to have a solid investment strategy but remain flexible. Markets change, and the best investors adjust without panicking.
It’s the Small Steps, Not the Long Strides
Your friend is raving about these new meme coins in the market, telling you that investing in this would be a good bet right now. How would you react to it? While meme stocks and speculative bets might seem tempting, building wealth is about steady progress, not lottery-ticket plays.
Championship teams don’t rely on one or two big plays. They grind out small, consistent gains, moving the ball downfield methodically. Long-term investors who steadily accumulate wealth through disciplined investing—rather than chasing overnight riches—tend to come out ahead.
Just as a successful portfolio is not built on a successful stock, a successful team is not built on a single star player. Diversification ensures you have the right players for every market condition.
Building a Winning Team
A team that relies on just one star player can be easily shut down by a strong defense. Successful teams play the ball around, making it harder for the defense to predict their next move. Not just the quarterbacks or receivers; each and every player that contributes to supporting the strategy of the game plays a big role in the team’s win.
Similarly, your investment portfolio shouldn't rely on just one type of asset. You need a mix of different investments, like growth stocks that perform well in good times and bonds or defensive sectors that help when things get tough. Diversification helps reduce risk and stabilize your returns over time, just like how a well-rounded football team improves its chances of winning.
Shielding Your Investments: A Defensive Strategy to Win
People say, "Offense wins games, but defense wins championships." It means that even if your team scores the most, you won't win the big games without a strong defense. In a similar instance, smart investors use strategies like diversification and stop-loss orders to protect their portfolios from big losses. The big game in investment is not always about gaining money; it is the aversion toward risk that makes them better investors.
Just as championship teams prioritize avoiding costly turnovers, smart investors concentrate on shielding their portfolios from significant losses. Protecting your portfolio during market downturns ensures you stay in the game.
Stay Calm, Think Long-Term
Players who let important moments in the game overwhelm them usually tend to cost the team a costly mistake. The real heroes keep their emotions in check and act swiftly when the time calls for it.
When the market crashes or stocks skyrocket, investors face a similar quotient to that of a core moment in football; they tend to panic sell their stocks in losses or recklessly buy stocks due to FOMO, creating a path for poor investment outcomes.
Just as a championship victory is the result of a season-long commitment to preparation, execution, and resilience, successful investing requires a similar long-term perspective. The best investors learn from their mistakes, build better strategies from those mistakes, and prioritize risk management while maintaining a system for investment to achieve their goals.
Jacob Falkencrone, Global Head of Investment Strategy, Saxo Bank
