Even if you are a casual sports fan, you most likely are aware of the annual US college basketball tournament-deemed “March Madness” that occurs every year at this time.
Many people enjoy the challenge of getting involved in betting pools to guess which of the 64 chosen teams will advance from one round to the next, until the coveted Final 4 teams are left, and ultimately a champion is crowned.
One of the things that makes it fun, is everyone knows that a few long shots will payoff and defeat the favourites-the problem is you need a crystal ball to figure out which one.
Whether or not, you have a rooting interest in the tournament, I thought you would enjoy this article, which examines 5 investing lessons we can learn from to the March Madness basketball tournament.
Have a great Sunday!
5 Investing Lessons From March Madness
Filling out a bracket for the NCAA championship basketball tournament is an annual highlight for sports fans like myself. Like most people, I don’t watch much of the regular season games, but every March I start reading expert picks and researching bracket strategy in preparation for pools with my family and friends. The process reminds me so much of investing because filling out a bracket balances expertise, risk, reward and future expectations.
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Mark, the markets have been going up for quite a while now, isn’t it about time for a significant correction or even a crash? What should I do”?
I have been hearing these type of questions ,from clients & contacts with greater regularity as of late.
The truth is no one knows when a correction or even a crash will occur, not even the legendary investor Warren Buffett can predict or time the markets. I know that I certainly don’t possess any magical powers in this regard.
However, it is true that in general the markets have been going up for an extended period of time.
History tells us that market corrections of 10% or more occur on average about once every year or two, and significant declines of 20% or more occur about every 5 or 6 years.
Does this mean that some headwinds are coming on the horizon? Inevitably yes, we just don’t know when.
However, I have found that having serious conversations about how we would, or might react when the markets do experience a temporary decline is a very valuable & practical exercise.
I have long referred to these discussions as “lifeboat drills”.
Here is an excellent article on how to take your own investment lifeboat drill, and how it can help you weather future disaster.
I encourage you to take the exercise, and contact me directly if you have any questions or concerns.