Stay Focused on the Long Game

Key Takeaways

  • Winners don't always stay on top
  • Having a balanced offense and defense is key
  • Stay focused on the long game

This year’s men’s basketball tournament is one for the history books! Aside from the usual bracket busters and Cinderella stories that accompany college hoops in any given year, 2023 marks the first time since 1979 that a top three seed did not advance to the semifinals. In fact, there have only been three other times (2011, 2006 and 1980) in the last 44 years that a number one seed is not playing in the semifinals. While selecting a number one seed (the most winning team) in your bracket may tilt the odds in your favor, it is no guarantee of success. Upsets can and do happen. Lower seeded teams can go on spectacular runs. That’s all part of the beauty and unpredictability of the game. In many ways, the process of filling out a bracket is like investing. It requires balancing risk and reward, while maintaining discipline. Below are five important investing lessons we can learn from college hoops:

    • #1 – Winners don’t always stay on top | While a number one seed in the men’s college basketball has traditionally advanced to the semifinals, their past performance doesn’t guarantee future success. Yes, the odds may work in your favor, but victory is by no means assured. This same dynamic is more profound in investing. History has shown that no single asset class has been a consistent winner year after year, just as no single asset class remains at the bottom. In the 23 years that we have run our own version of ‘bracketology’ – which uses nine broad asset classes consisting of cash, equities, fixed income and commodities – the best performing asset class (i.e., the number one seed) has only come out on top once! To illustrate, oil, the number one seed in our 2023 bracket after an impressive 56% return in the year ending February 2022, finished at the bottom this year, down 19.5%.