With the 2014 winter Olympics in full swing, it has me thinking: What personal finance lessons can we learn from the games?
John Nersesian is the managing director of wealth management services at Nuveen Investments.
1. Beware of fads
What do tug-of-war, solo synchronized swimming and live pigeon shooting have in common? They were all once Olympic events. While it is important to keep an open mind, always beware of the “next big thing.”
2. Remember diversification
The hopes of Team USA do not only depend on Shaun White. A diversified portfolio of strong and uncorrelated performers tends to provide consistency and positive results.
3. Expect the unexpected
Every Olympic Games shows us things we have never seen before. While the past provides perspective and context, it is no guarantee of future results.
4. Plan, plan, plan
The glamour and excitement of the games is possible because of a foundation of proper planning. Similarly, a financial plan is the foundation of a process towards personal financial success.
5. Examine the track record
Athletes don’t make the Olympic team because of one performance. It takes years of preparation, hard work and success to represent one’s country at the games. Investments are no different – diligence, consistency and expertise are traits that may lead to financial accomplishment.
6. Do not expect shortcuts
What fans see at the games does not happen overnight. Success takes a lifetime of hard work and discipline. There are no shortcuts to a healthy financial future.