There is a reason football coaches spend so much time talking about blocking and tackling. They’re not particularly glamorous. Nobody buys a jersey because they love watching a perfectly executed block. That is why offensive lineman jersey sales aren’t exactly eye popping. Nobody goes home from a game saying, “Did you see that textbook form tackle in the second quarter?”
But coaches know something fans sometimes forget. If you can’t block and you can’t tackle, all the fancy plays in the world aren’t going to save you. Investing has its own version of blocking and tackling. A lot of the recent upsets in both college and pro football came down to this.
Save consistently. Diversify. Keep an emergency reserve. Don’t take risks you don’t understand. Rebalance when necessary. Keep your costs and taxes in mind. Have a plan for what happens when the market goes down.
None of those things will make for a particularly exciting dinner conversation. They’re not the financial equivalent of throwing a 60-yard touchdown pass into triple coverage. But they work. And just like football, the basics need to be practiced over and over again because knowing what you’re supposed to do and actually doing it are two different things.
This is where investors sometimes get themselves into trouble. Once they understand the basics, they start looking for something more complicated. A new investment strategy. A hot sector. Some clever way to beat the market. There’s nothing wrong with being sophisticated. But sophistication should come after you’ve mastered the fundamentals, not instead of them.
Think about the best football teams. They certainly have creative offensive schemes. They move players around and come up with plays that make you wonder how anyone saw that coming (sound like any of our favorite teams the past few year?). But underneath all of it, somebody still has to block the defensive end. That’s investing too. Get the basics right first. Keep working on them. Then, if there is a good reason to get a little cute, go ahead. Just don’t forget that the basics are what got you there.
