After watching Super Bowl LI I felt shocked as the game progressed. The ending was unexpected given the events of the first three quarters. All I can say is WOW….
Altanta was ahead 28 to 3 and was dominating. Anyone watching would have said an Atlanta win was a sure thing. The owner of the Falcons Arthur Blank was down on the field with 10 minutes to play. A championship was assured. His Atlanta Falcons would win the Super Bowl and be awarded the Lombardi Trophy. Being a Packer fan I had to mention our old coach Vince Lombardi.
Then Tom Brady and the Patriot defense took the game over. With one minute to play the score was tied 28 all. Atlanta had one last chance to win in regulation. The Patriot defense held and there was overtime. In overtime New England won the toss marched down the field to score a touchdown and win the Super Bowl.
What was once a sure thing for the Falcons turned into a devastating loss.
What does this mean to investors?
Many times, investors watch the markets and see an asset class(es) or individual stock or investment product charging ahead or even dropping ‘like a rock’. And think I need to put all my money into that….or sell everything I own in that….
It is a ‘sure’ thing. Can’t lose. It’s the new paradigm. Traditional investments are dead this is the new thing.
There are thousands of examples of just this kind of thinking.
Then something happens. The fourth quarter begins and everything falls apart. What was once a sure thing, is now dead in the water. No one wants to touch it. Losses keep mounting and investors have all their money in one thing.
Devastation ensues. Investors panic and decide to never invest again.
The problem is they were never investing in the first place. They were gambling and speculating with their investment money.
Investors need to realize that there is no such thing as a sure thing. Anything can and will happen. Many times, unexpectedly.
To succeed investing long term you need to own equities and high quality short term fixed income…globally diversify…rebalance.
Follow these three rules with the help of an investor coach/fiduciary adviser and success will be yours.