3 Investing Tips from Super Bowl XLIX
By Dian Vujovich
You can learn a lot about investing from a football game. Particularly when it’s a game between champions aggressively pursuing stuff. The stuff the Super Bowl XLIX winner walked away with includes a much-coveted title, diamond rings, recognition, money, money, more money, etc. The stuff smart investors can walk away with includes all sorts of assets—sometimes even a title and diamonds—and accounts filled with money.
Since the money game is pretty much the same on or off the field, here are three investing tips from this year’s Super Bowl game between the Seattle Seahawks and Boston Patriots:
1.Follow your team.
I watched about five minutes of Super Bowl XLIX preferring to watch PBS instead of the entire game. But, every now and again I’d switch channels to find out how the Big Game was going and to see the score.
Translated that means that I basically turned to the game once during the first, second and third quarters, never saw the half time show, and tuned-in to watch the last two- and one-half minutes.
From that perspective, what a heck of a game it was.
And that brings me to the first investing tip: While you’ve got to be in the game in order to make any money, watching your equity or fixed-income holdings every minute of every day isn’t necessary. Unless, of course, you’re an active trader, which is something most people are not.
That said, reviewing portfolio holdings is a smart move whether your investment goals are short- or long-term.
So quarterly reviews are fine and annual reviews a must to see whether your money is working for or against you. And just as a winning team puts different players in the game at different points in time, so do wise investors who recognize different market conditions require different investment plays.
2. Scores change.
In Sunday’s championship game the score was 0-0 at the end of the first quarter. That’s what returns look like on an opening balance the first day someone opens an investment account. It’s after that opening day play when bottom lines begin to change.
Re the game: The score was tied at the end of the second quarter, Seattle was 10 points ahead of the Patriots at the end of the third and by the end of the fourth quarter the Patriots had won the game.
Using the S&P 500 as our investor’s scorecard, how long you’re invested– in anything– determines the gains and losses you’ll receive. As in football games, investment returns always change.
For example, according to Morningstar if you had owned shares of the SPDR S&P 500 ETF (SPY) for the past 15 years, ending 1/31/15, its total return averaged 4.31 percent. For the past three years, that same ETF’s total return average was 17.32 percent.
Tip No. 2: As in the game of football, time dictates Investment returns.
3. It ain’t over till it’s over.
Anyone who left the University of Phoenix Stadium five minutes before Sunday’s game ended absolutely positively missed the most exciting—and valuable— part of the game. The same is true with investing.
When nearing the end of your life’s game, if wills and or trusts, or final personal plans and arrangements haven’t been made, created and/or updated all the hopes you may have had for passing your treasures on to heirs, friends, charities, dogs, cats, etc. will vanish as quickly as did the Seahawks chance to win this year’s Super Bowl because of their are-you-kidding-me last play choice.
Investment Tip No. 3: Making sure your final play plans are executed properly is as important and valuable as creating an investment portfolio is.
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