As the 2023 Rugby World Cup is under way, now is a good time to take a lead from rugby coaching staff in your investing journey.
“We know that winning a Rugby World Cup relies on a number of factors coming together - the right coaches, right plan, right team, right mindset etc. And growing wealth actually has quite a few similarities,” said Siyabulela Nomoyi, quantitative portfolio manager at Satrix.
According to Nomoyi, some of the winning aspects of a good Rugby World Cup campaign could be applied in the world of investing.
Here are six rugby roles that you can take on in your own winning strategy:
1. The Head Coach: Strategy is Everything
Just as rugby teams strategise, dissect their opponents and forge plans to increase chances of a win, your investments need a game plan.
“To successfully build wealth through investing, you should look at crafting a roadmap that aligns with your long-term goals and risk appetite,” Nomoyi said.
You can do this with the assistance of a financial adviser or by doing careful research and using financial information that is available online to help you build the right plan.
2. The Selector: Diversity is Key
The Springbok squad for the 2023 World Cup has a mix of players who all bring something special and unique to the squad.
Similarly, diversification in investing is a key play, said Nomoyi.
By spreading your investments across various sectors and asset classes, such as local and global equities, bonds and cash, you create a cushion against market fluctuations.
This tactic reduces the impact of a single loss on your investment portfolio and could amp up your overall portfolio performance.
3. The Tactician: The Right Tools Should Be in Place
The Springboks have constantly come up with new configurations for their bench to keep the on-field momentum going like the seven-one tactic that they have been experimenting with.
Just like these tactics keep the Springboks forward momentum consistent, low-cost index funds do the same for your investments.
They trim down fees that could otherwise eat into your returns over time, keeping your investment's efficacy intact.
4. The Whole 15: Balancing Risk and Safety
Have you ever noticed the way that the Springboks choose the right moments to take risks on the rugby field? Well, your investment journey will also thrive on your ability to balance risk and safety.
“A well-rounded investment portfolio combines both high and low-risk investments,” Nomoyi said.
5. The Captain: Weathering Market Storms
The resilience that the Springboks showed after their tough loss in their first game of the 2019 tournament was a hard lesson, but the team bounced back and took home the trophy.
In the same way, when investment markets are turbulent, it is important that you maintain your investment strategy.
You should resist the urge to make impulsive changes if there are downturns in the market. This will ensure that you don’t lock in any losses, that you can stay in the market when it starts to perform better again and it can lead to long-term gains.
6. The Analyst: Learning from Wins and Losses
Like with a rugby game, investments, no matter the outcome - good or bad - can teach you a valuable lesson.
“So, as you tune into the Rugby World Cup, consider how the strategies employed by different teams could guide your investment journey,” Nomoyi said.
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