Is Picking you Fantasy Lineup all that Different from Investing?

Is Picking you Fantasy Lineup all that Different from Investing?

August 24, 2021

NFL pre season is in full swing and many of us are gearing up for our Fantasy Football Drafts in the coming weeks. The team we choose will determine how far we go in the league and if we end up champions at the end!

But is drafting our team all that different from determining our investment lineup? Here are some considerations that are vital to having both a good fantasy season and keeping up with the markets. 

Research the players

When you’re next in the draft order are you blindly picking a player, or have you researched who you’d like to have on your team? Probably the latter, we all want to pick a running back who can also catch a pass. Similarly, we need to research the funds we decide to invest in. Ideally, we pick funds that can capture growth in the market but retain some of their holding in a downturn.

Look at Historic performance

Is a rookie your first pick in your draft? Unlikely, because if you want a chance at winning your league you want to find someone who you know can perform consistently at the professional level. Even if they scored 50 touchdowns in their last year of College Football, the NFL brings it’s own challenges and you want someone who knows the ropes and can keep up.

In investing we always look at the long-term performance. Just because a fund had a stellar quarter last month, doesn’t mean it’s right for our clients. We want funds who are consistent and have a good track record. Typically, we’re looking at performance over the long term such as 10 years or inception.

How’s the coaching staff?

We’ve all watched a game thinking to ourselves that this coach should be fired. He’s not a good leader, he makes bad calls, and it doesn’t really seam like he knows what’s going on on the field. In the investment world, funds have Portfolio Managers, aka the coaching staff of that particular asset. They understand the market, know the underlying investments, and are expected to make good calls if things aren’t going according to plan.

One of the benefits of working with a wealth advisor is that we actually get to meet and talk to these portfolio managers. We have discussions with them, and their team, to understand what the underlying holdings are, how they’re expected to perform and what direction the team will go if things don’t necessarily go according to plan.

Is your team complete?

We know we can’t have a team of just quarterbacks. We need to cover the offense and the defense, make sure we’ve got quarterbacks, linemen, running backs, kickers, snappers, etc. Our team needs to be whole so we know we can play no matter what position we’re put in on the field.

You’ve heard the term diversifying when it comes to your investments. It’s another way of saying our team is complete. A portfolio full of single stock positions is great until the market takes a turn for the worst and we find ourselves down double digits overnight. The best way to structure our portfolio is to strategically put together investments that play off of each other. For example, we want to capture returns in both the Growth and Value space, so we’ll hold a large cap growth investment as well as a large cap value. But what if large cap isn’t the main runner at this time? That’s why we have mid and small cap companies in our portfolios as well. The same sentiment goes with holding both domestic and international assets and of course a fixed income portion in our investments.

As it turns out, researching our investment holdings and putting together our Fantasy lineup isn’t all that different. We have to do our homework, monitor our progress and make adjustments to give ourselves the best chance of success.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.