Picking the right investment strategy to meet your financial goals may seem as challenging as predicting which team will win the annual NCAA tournament. However, there are a few ways that picking an accurate March Madness bracket parallels a successful investing strategy. Here are a few tips to keep in mind:
Look for a solid coach. A good way to successfully create a bracket is by selecting teams that have a coach with a solid track record. This is also true for your investment strategy – set yourself up for success by working with a qualified, experienced investment advisor. Think about your advisor as a coach. Look for someone with experience, who is going to inspire you and who can create a game plan for your unique needs. Like a good coach does for a team, your advisor should act in your best interest and be committed to putting in the time and energy to help you achieve your goals.
Don’t focus on one winner. A good strategy is to focus on more than picking the overall winner. For a successful bracket, you may need to pick the ultimate champion, but you have to make sure you pick other teams that win games along the way. The same is true with your investment strategy. You shouldn’t try to pick just one winning investment. You need a diverse portfolio that will help create a strong foundation aimed at meeting your tolerance for risk and investing goals.
Do your research. Randomly picking who will advance each round usually is not the best strategy. You may find more success by researching which teams are poised to do the best. The same holds true for your investment portfolio, do research, or partner with an advisor who will do the research for you, to see what is compatible for you and your portfolio. Look for investments with consistent track records that may help demonstrate they can withstand the ups and the downs of the market. Just like putting in the time to practice often creates improvement for a basketball team, doing research may bring positive results to your investment strategy.
There will be some upsets. As a basketball fan and an investor, there are going to be upsets. Historically, we have seen surprises during March Madness where a lower-ranked team pulls off a surprise win against a top seed which makes for an exciting tournament. There will also be surprises in the market that affect investment success, however, this is a normal part of the investing cycle and shouldn’t take your eye away from the long-term goal. You must learn from losses, consider necessary adjustments and stay in the “game.” Just as good teams come back from upsets to do better the next year, if an investor stays the course, a well-constructed, diversified portfolio usually rebounds as well.
Don’t forget to have fun. We all like to root for our favorite team or alma mater and the same can be true for your investment strategy. Consider investing in some companies you use and like, but keep it within reason. While you may have a Cinderella story, you do not want to be overly optimistic and put all your eggs into one basket.
Remember, it’s very difficult to predict the winning teams and the same is true for picking an investment strategy. Investing requires discipline during both rewarding and challenging markets and working with a trusted advisor can help coach you through a smart approach. To have a conversation about creating a plan based on your tolerance for risk and investing goals, please contact us at 215-721-2112.
Securities and insurance products are offered through Univest Investments, Inc., member FINRA/SIPC and a licensed insurance agency. Investment advisory services are offered through Girard Partners, a Univest Wealth Management Firm. These affiliated companies are licensed subsidiaries of Univest Corporation of Pennsylvania. Products and services offered are not FDIC insured, are not a deposit of or bank guaranteed, and are subject to risks, including possible loss of any principal amount invested.