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Fantasy Football and Investing: Speculation and Gambling vs Prudent Advice?

By The Editor

30th Nov 2022 | Advertisement Features

In her latest blog for Kingston Nub News, Head of Marketing and Operations, Katie Lovatt, from local business Holland Hahn & Wills, offers a fascinating insight into making prudent financial decisions and the importance of building stable investment foundations.

A busy weekend means different things to different people. For some it's the chance to catch up with family and friends, to visit museums, read the papers or watch a play or film. For others it's an opportunity to do or watch sport. A couple of weeks ago saw lots of people flock to Twickenham to watch England play at rugby. Sadly, England lost, but the buzz in and around Twickenham was exciting and friendly!

In our house, there were also a number of football matches being followed. The ping of text banter between friends devotedly supporting their beloved teams reverberated throughout the house. In many ways, the highs and lows of supporting teams is similar to how many people approach investing.

The global fantasy sports market has exploded in recent years. One reason is that the younger population is growing and has ready access to digital infrastructure, affordable smartphones, and fantasy sports apps.

Is this what therefore encourages keen investors to speculate in the financial markets?

Today, stock trading programs sit alongside fantasy sports apps in smartphones, offering easy access to stock or cryptocurrency trading—and sometimes faster than it would take to pick up a new tight end or place a bet on Sunday morning. But with an investment portfolio, the fantasy can only go so far and the stakes can be much higher.

This may be a good time to think about the difference between speculating and long-term investing—and recognize that investment decisions have real and lasting consequences. Building a stable investment foundation is key to helping minimize bad outcomes and positioning for the potential rewards in the capital markets.

Below are four steps to help ensure you're making prudent financial decisions:

  1. Understand the impact of your decisions: It may be easy to get caught up in using convenient, digital platforms to pick stocks or time markets. But without a solid investment philosophy, everyone runs a greater risk of getting caught up in the emotional roller coaster of speculation. Convenience and instant gratification are poor substitutes for a strategic, long-term investment approach guided by proven market principles and decades of research into asset behavior and portfolio design.
  2. Think long term: The fantasy football season lasts just a few months. That's not the same as taking a lifetime view of accumulating and managing wealth. Your investment decisions should be based on a time horizon that matches your goals. Speculating on individual stocks or industry sectors encourages a short-term mindset that can be easily jarred by unpleasant surprises. Investing involves a longer-term perspective that rests upon a historical understanding of markets.
  3. Know your investments: Digital platforms can give access to an ever-expanding range of alternative investments, from cryptocurrency to single-stock exchange-traded funds. To pursue good outcomes, it's critical to understand the characteristics of stocks, bonds, real estate, and other asset groups—and their specific role in your portfolio. This means evaluating an investment's expected returns, range of risks, and potential costs.
  4. Seek out a qualified financial adviser: One way to create and manage an investment plan is to enlist a professional. Working with a financial adviser can help outline clear financial goals and make investments that are contributing to those goals, instead of simply gambling on the market. An adviser can also help you focus on controllable factors, such as diversification, portfolio rebalancing, and tax management. Daily market moves are beyond anyone's control, but you can choose how to react in a tough market.

Investing is not a game, and it shouldn't be treated like one. So, sit back and enjoy the rest of the rugby / football season. If that fantasy league makes it all more interesting, so much the better.

Just understand where in life you can afford to lose—and where you cannot. Financial security is built over years, even decades. Not on any given weekend.

With a solid investment plan and discipline to match it, you can pursue long-term success without the anxiety and emotions that come with speculation.

Holland Hahn & Wills is a sponsor of Kingston Nub News.

Their community-minded sponsorship means we can publish our local, high-quality journalism without intrusive adverts or clickbait.

Read more about the great work they do supporting Kingston's community HERE

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