Every four years, Europe comes alive with football fever as the European Championship takes centre stage and the best national teams from the continent vie for glory.
This year’s Euros tournament in Germany didn’t disappoint. The competition reliably delivered an emotional rollercoaster of triumph, perseverance, disappointment, agony, heroism, victory, and of course, heartbreak. England returned home trophyless once again and Spain erupted into euphoria as they brought home their fourth European Cup.
As with all great sporting contests, the narrative of the human experience is mirrored in the trials and tribulations of the teams, the players, and the managers. And as with all great narratives, every aspect of life can be seen through the lens of the beautiful game.
So, with the tournament behind us, read on to discover the practical lessons the Euros can teach you about financial planning.
The importance of ignoring “noise” from the outside world
As England plodded through their group and struggled to find form in the early stages of the knockout rounds, the English media, punditry, and fanbase were rife with criticism for the team, the players, and manager Gareth Southgate.
Everyone had their version of a starting squad and, while no one could agree on every detail, one thing was certain: England was not delivering.
During the intense criticism, ESPN reports that Southgate blocked social media from his phone to filter out the “noise” coming from outside the camp, and he advised his players to do the same.
While listening to trusted confidantes is usually advisable, having the strength and will to ignore external noise is integral for cultivating a successful mindset.
Like Southgate and his team, as an investor, you may often find yourself bombarded with news, opinions, and advice from a whole host of sources. Much of the information you encounter may be conflicting, particularly in the modern world with the 24-hour news cycle and social media.
The noise could lead you to make decisions based on short-term trends or volatility and distract you from your long-term goals. You may be led to follow the herd or exit the market amid a dip before you have the chance to recover.
But in financial planning, like Southgate’s management approach, it’s essential to cut through the noise, ignore the hype around you, and focus on a long-term strategy.
Having depth and diversity can improve overall performance
Many pundits and fans regard Kylian Mbappe to be among the greatest living players. So, it was a huge blow to the French team when he broke his nose in their opening game against Austria.
Unable to continue, Mbappe was replaced by Olivier Giroud, who just so happens to be France’s highest-ever goal scorer, with 57 international goals to his name.
Although Mbappe and Giroud’s playing styles and favoured positions are markedly different, it is a testament to the depth and diversity of the French team that they can take off one of the world’s best players and replace him with their record goalscorer.
Just as the French team thrives from having a variety of skilled players with different strengths, your investment portfolio could also benefit if you diversified it across a range of asset classes, regions, and sectors.
A diversified portfolio mitigates the risks of concentration and maximises your opportunities for capturing growth.
So, it could be a good idea to diversify your holdings, to ensure you have an alternative if one of your star performers runs into trouble.
Managing risk can help prevent misfortune
About half an hour into the last-16 battle between Germany and Denmark, the referee looked to the heavens and blew his whistle, signalling that all players should leave the pitch.
Above them, the sky was alit with lightning bolts and the rain and hail fell with such intensity that it cascaded off the stadium roof creating a small waterfall.
Although some of the players expressed their frustration at the referee for stopping the game before half-time and interrupting the flow, he decided to do so to ensure that they would play under conditions that didn’t pose a risk to their safety.
The action taken by the referee was an effective form of risk management, which is also crucial in financial planning for safeguarding your investments.
As you read above, risk management could include portfolio diversification, it could also encompass financial protection, risk tolerance assessment, building an emergency fund, and a regular review of your goals and financial position.
Understanding and managing risk is key to protecting your finances against unexpected events and ensuring steady progress towards your objectives.
Despite the similarities between risk management in the Euros and your financial plan, a financial planner is likely a better option than a football referee for assessing your risk tolerance!
Experts can assist you when you need advice
When discussing the competitors at tournaments such as the Euros, you likely refer to either the squad of players or the manager.
Yet, there are many more people involved in the footballing success of a nation whose names and roles you probably don’t know – the physios, set-piece coaches, psychologists, physical trainers, nutritionists, and more.
Each of these people must be a highly experienced leader in their field to reach the point of working with a national football team. They are the experts who the manager and players can turn to when they need advice tailored to their unique needs at a specific moment.
This dynamic echoes the value and importance of speaking to a financial planner. They can work with you to build a plan tailored to your goals, and help you navigate the complexities of finance and the market with confidence and clarity.
To speak to a financial planner, get in touch.
Email us at hello@vwmwealth.com or call us on 0141 229 4004.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
