March Madness Lessons
/Going into March Madness and selecting your bracket, there’s a few things to think about.
We all need a “Coach”
Great coaches excel in providing leadership, instilling confidence, and leveraging their team members' strengths and natural talents. While players execute moves on the court, it's the coach who devises and implements strategies to guide the team effectively.
Maintaining adherence to a plan poses challenges, especially when players face pressure from fans and sports writers to deliver standout performances. Hence, one of the paramount qualities of a competent coach is the ability to foster a trust-based relationship. Without trust, even the most well-crafted plan risks being disregarded.
Similar principles apply to your financial plan. There are many key players such as your advisor, investment manager, and financial services associate. The finest among them work together to assist their clients in maintaining confidence in their goal attainment, even amidst short-term market fluctuations that may suggest otherwise.
Should you rely on guess-work?
The idea behind March Madness — and much of the fun — is predicting how the tournament will unfold and which team will emerge as the winner. You can analyze past performances, or study point differentials, first round win percentages, and any number of other metrics. Ultimately, it’s a guessing game. The same holds true for the market.
Investors employ everything from past pricing history to sophisticated software in their quest to choose the big market winners. Your advisor, however, knows the goal isn’t predicting the next maven. It’s building and managing an investment portfolio that can address your specific goals, for you to live your life of abundance.
Picking the NCAA tournament champion may win you bragging rights or a few bucks from the office pool. But a financial professional's personalized guidance and focus on your long-range financial plan is what can get you working towards a winning investment strategy.
Facts over feelings
Emotion-driven decisions can shadow both March Madness and investment markets. When there are fluctuations within the markets, investors receive heightened emotional responses. The NCAA tournament's drama mirrors market fluctuations, with intense moments and unexpected outcomes capturing attention. While the thrill of March Madness fades after the championship, emotional investment decisions can have lasting financial consequences. Financial advisors offer relief from daily market stress, guiding investors away from impulsive choices that deviate from their plans.
In both bracket predictions and investing, facts must outweigh feelings. Wishful thinking can often cloud your decision-making, leading to undesirable outcomes. Whether picking a tournament winner based on alma mater pride or following the crowd in investment trends, emotions can affect your judgment. Guidance from your advisor offers a rational approach, utilizing research and expertise. Your advisor is there to help you navigate complex financial landscapes with your best interests in mind.
Individual investors who depend solely on themselves face the potential of succumbing to emotional pitfalls similar to those experienced in March Madness brackets. In contrast, your Gilbert & Cook team can prioritize factual analysis over impulsive decisions, dissuading from following herd mentalities or emotional biases. By adopting a disciplined, evidence-based strategy, investors can minimize risks and effectively pursue long-term financial objectives under the guidance of your advisor.
Everyone can relate to a come-back
Of course, we do love to see an underdog win. The problem with that is underdog successes aren’t that common in the later rounds of the NCAA tournament. Remember that when you pick those teams for your bracket.
The same can be said for investing. It may be fun to select the under-dog investments, but they generally involve an increased level of risk. Work with your Gilbert & Cook Advisor to assess your risk tolerance. Assess this each year to keep you dialed into your goals.
Your financial well-being is no game
Regardless of who you pick to “take it all” for March Madness, life returns to normal the following day —no matter the outcome of the tournament. That championship game is just that: a game. That’s not the case with your financial well-being, it’s your future.
You really can’t do much to increase the odds of a perfect March Madness bracket. You can improve your chances of achieving your financial goals by working with your advisor to put together a thought-out plan to help get you on the winning path, to live a life of abundance®.
