It’s the best time of the year for lots of sports fans, particularly those who love college basketball. More than 70 million brackets are filled out during March Madness with everyone hoping they are this year’s expert, balancing said expertise with risk, reward, and future expectations. While perfection is unlikely (a 1 in 9 quintillion chance), positioning yourself to have the greatest likelihood for success is key. Regardless of your bracket’s outcome, there are a few lessons from the concept of March Madness that can be learned and applied to your retirement investing strategy.
While you don’t have much control over factors impacting your bracket, you can prepare for and control various aspects of your financial plan that help increase your chances of a prosperous retirement. First, it’s important that you don’t make hasty decisions based on past performance. Myopic loss aversion argues that the more you watch the market, the more likely you’ll be to make poor investment decisions. That’s because people tend to fall into the pressure to change their investment decisions based on the daily fluctuations of the market.
To be successful, you must remove emotional and cognitive biases from decision making. A lot of people have some sort of pattern or system they follow when selecting their bracket, whether it’s picking their Alma mater or a certain seed beats another, etc. while disregarding evidence and probability. This is likely a less than ideal strategy for both your bracket, and definitely for your portfolio. A quality decision making process regarding investments allows us to ensure that we aren’t ignoring or misinterpreting probabilities, making up patterns that actually don’t exist, or making poor investment decisions based on emotions. We can help take the guess work and emotion out of investing by working with you to create your financial plan, taking into account your personal goals and what matters most to you in retirement.
There is no “best” strategy for March Madness brackets, and similarly, there is no “one size fits all” approach to financial planning. We can help evaluate and assess the standing of your current financial plan with a complimentary, no obligation review. CLICK HERE to request your review and we’ll help show you the ways to create a personalized “bracket” for retirement.