Investing like the Toronto Raptors

I learnt early in my career from one of my mentors that investing is not about being right all the time; it is about being right over all of the time.

Investing can be emotional. Wins feel amazing but losses seem to always hurt twice as bad – similar to the past several years following the Raptors! From my experience, many investors seems to follow trends and buy large amounts of a few companies hoping to hit it big which is basically gambling. However, most forget that over 65% of the difference in returns of your portfolio does not come from stock picking. Rather it comes from ensuring you check your emotions and stay in the market over the long term while making sure your money is spread out over different investments (aka diversification).

Just like the Raptors, you do not need to put all your eggs in one basket. Yes, you will have a superstar (i.e. Leonard) here and there, just as if you might have a favorite stock or fund. You also need many role players on your team to help with your bench strength. In the world of investing this means having a bunch of high quality investments to round out your portfolio.

Like a great coach, a financial plan is a great way of ensuring any investment being made is in line with your overall goals and not based on emotion or whatever stock is the “flavor” of the month.