Can the World Cup Teach You Something About Investing?
Sat, Jul 10, 2010
I found this video interesting in which Brett Arends, Wall Street Journal columnist discusses some practical investing tips we can pick up from this year’s World Cup. Sports can teach us a lot about life as you may have gathered growing up playing your favorite team. But more narrowly, the World Cup and other sports can generate some good tips on money management.
I picked up on three things Mr. Arends mentions in the video:
1. Don’t be shocked when the unexpected occurs. As in soccer upsets and shocker moments, there will be such moments in the stock market and even in everyday finance. Don’t let these moments rattle you. Rather, continue sticking to your plan and also do what you can in preparing to withstand such shocks. So, if the market takes a dive, diversification and staying calm will help you.
2. Speaking of diversification, the World Cup is the one sport that gets us thinking outside of the US. Every portfolio needs to have an international component which simply helps in further diversifying and helping withstand US economic impacts.
3. The least interesting tip was around the rules of the game. You can’t always depend on the referees to come through for you, but neither can you depend on the SEC to do everything (so says Brett) on the regulation front. I suppose even the SEC isn’t a perfect organization either since the recent economic problems saw large financial organizations with questionable practices.
Overall, the idea of gleaming tips from a sporting event such as the World Cup is a great idea. What other ways can the World Cup help people on the personal finance front?
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Tags: Diversification, Investing
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No. 2 is especially relevant. Since the US is a large, heavily populated country, we tend to be insulated in our little sandbox here, as though the rest of the world sort of doesn’t exist. When we see the rest of the world going ga-ga over the World Cup, in a way similar to our Super Bowl or World Series, it brings home the point that the world is much bigger than just America.
Most of the investment opportunities that exist are now outside the US. We need to think beyond the borders where investment is concerned, otherwise we might leave the best choices off the table.
One other semi-related thing on this point…for Christians, we should be thinking globally anyway. From a faith perspective, God hasn’t drawn borders around people. “Foreigners” are no less worthy of our interaction and witness than Americans.
Kevin@OutOfYourRut´s last blog ..Why Bundling Services Might be a Bad Deal
Kevin, thanks for further along the point of looking outside of the US from an investment standpoint. I hadn’t really thought of investing in the Christian light you mention, but I agree people are people and we should be open to interacting with them from a financial standpoint too.