Strategic’s Final Four Picks

Greg Mattacola

Tournaments and Retirement Plans are Not Won with Longshots

March Madness is back! After last year’s basketball tournament was cancelled due to the pandemic, it is sweet indeed to welcome bracketology back to our vernacular. And as much as we love our brackets here at Strategic, we nerd out over retirement planning and sound investing even more. We cannot help but notice the obvious parallels between the NCAA tourney and investing for your retirement. Obvious? Yes indeed! Like Dickie V. has done for so many years, let us break it down.

The tournament loves a Cinderella story – it makes for great drama and story lines and keeps us all glued to the screen. Think Jim Valvano’s 1983 N.C. State Wolfpack triumphing over the heavily favored Phi Slamma Jamma of Houston. Think 10 seeded 2008 Davidson with Steph Curry who reached the Elite 8. Remember 2011 VCU who got in on an at-large bid and made it all the way the Final Four? And who can forget Sister Jean and the 2018 11 seed Loyola Chicago who also made their way to the Final Four? Great, fun stories that made us all feel good, and which also busted up our brackets beyond repair.

Yet, for every one of these, history is littered with Cinderellas whose carriages turned back to pumpkins long before the ball was over and whose feet never got near the glass slippers. When thinking of investing for your retirement, the goal is not just to make the tournament and survive a few rounds – the only acceptable outcome for us is for you to cut down the nets, having achieved every one of your retirement goals.

Sure, it’s fun to watch the Cinderellas and occasionally one does catch lightning in a bottle; but far more often, the trophy is raised by the blue bloods – Duke, North Carolina, Kentucky, UCLA, Indiana, Connecticut. Those six schools have thirty-nine championships between them! Think of them as the stalwart companies who have sound structures, strong financials, consistent earnings, and whose stock prices are in proportion to their value. Yes, Tesla is a great story, but it is a rare one.

Does this mean that we only go for the mega-cap dynasty investments when looking at your portfolio and bet your entire future on their success? Of course not – we make sure it is diversified across the board with exposure to all different sizes and sectors. No different than sprinkling in some mid-major teams to your bracket along with the occasional small school whose program is doing all the right things and is trending in the right direction. Diversity is crucial, for your bracket and for your portfolio.

So, as the madness of the pandemic somewhat subsides, we welcome back March Madness with open arms – all the while knowing tournaments and retirement goals are won not with the longshots, but with the tried and true. Enjoy the tourney!

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Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on total client assets of over $2 billion.

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Strategic’s Final Four Picks

Tournaments and Retirement Plans are Not Won with Longshots

About Strategic

Disclosures

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