After nearly a month full of football craze, the FIFA world cup 2022 finally ended with Lionel Messi-led Argentina winning their third world cup title by beating France.
The thrilling match had everyone sitting on the edge of their seats, with the penalties finally breaking the deadlock and resulting in Argentina's victory.
While we all know that football as a sport has a lot to teach us about life, did you know that the FIFA world cup also has investment lessons for us, especially for stock market investors? Curious to know?
Read on as we decode some investment lessons that we all can learn from the FIFA World Cup.
As soon as Lautaro Martinez hit the winning penalty in the final, almost everyone from team Argentina rushed towards him, except Lionel Messi, who went and hugged his goalkeeper Emiliano Martinez, who saved two penalties. He indeed was the true saviour, wasn't he?
Similar to Messi's gesture, in investments, there are many stocks towards which a majority of the crowd might be running and buying because of their higher probability of success. But amid this, one can miss out on some other 'lesser' known or talked about stocks which can turn out to deliver amazingly high returns.?
So, it is important to identify and include such potential stocks in your portfolio to give you the edge, instead of only chasing the 'popular' or consensus stocks which the crowd is running after.
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In a move that surprised many around the world, 37-year-old Cristiano Ronaldo, who had been struggling a bit with his form, was benched during Portugal's Round of 16 against Switzerland in this year¡¯s tournament. After all, he is one the greatest footballers of all time.?
But it turned out, that the man who?replaced him in that game, i.e. 21-year-old Goncalo Ramos stunned fans by scoring a hattrick and playing a key role in Portugal¡¯s 6-1 convincing victory in that game.
That game between Switzerland-Portugal showed us that it is important to identify stocks/mutual funds which are underperforming?and replace them with new and emerging ones which hold the potential to achieve your expected returns.
It will remain an unforgettable world cup for Morocco. Morocco created history in this world cup by becoming the first ever African team to enter the semi-finals of any FIFA World Cup. It was an unbelievable moment for many around the world.
After failing to qualify for many previous world cups and managing to reach just the group stage in the 2018 world cup, reaching the semis in this year's world cup was no less than a dream come true for them. The country and its team's hard work indeed paid off.
Morocco's rise and success in this world cup show us that the journey to becoming a successful investor can be full of failures, but small yet continuous efforts, hard work, patience and belief in yourself can help in wealth creation, especially over the long term. The power of compounding is probably the biggest example of how consistent efforts can help in creating wealth in the long run.
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In most of the previous decades, footballing giants Italy had emerged as finalists and semi-finalists multiple times. They had been World Champions four times. But despite the long list of accomplishments, Italy failed to qualify for Qatar 2022 World Cup. This was a huge disappointment for the nation and its fans.
But therein lies the lesson that one should never get complacent with their investments too. You should keep monitoring them at regular periods of time, compare them with peers for a reality check, and replace them with other alternatives if the portfolio's goals seem to be out of reach for existing investment choices.?
After all, no matter how successful you have been and how high you have flown, getting complacent can pull you down into the harsh reality.
Last but not least. Brazil were undoubtedly amongst the favourites to win this year's world cup. The team, filled with star-studded players such as Neymar, surely had the ability to win the tournament. However, they have been inconsistent and performed only in bursts.?
Between 1950-1970, Brazil won three times and were runners-up once among the six world cups that took place during that time.?Then after 1970 and prior to 1994, Brazil failed to become finalists and again from 1994 to 2002, wherein three world cups happened, they won two times and were runners up once.
And in this year's world cup, they were knocked out by 2018's finalists Croatia in the quarter-finals.
Brazil's world cup journey teaches us that some popular stocks can perform inconsistently. But in the periods wherein they do perform well, they are likely to give more than expected returns over certain periods of time. So, the key is to identify those phases and make investments appropriately to get the most out of such stocks/investments.
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