Football's lesson for your personal finance

Waka Waka

Football's lesson for your personal finance

Shakira’s anthemic Waka Waka  is actually a new version of an old Cameroonian song titled Tsamina. The words Waka Waka translate in English to “do it – get the task done”. When it comes to personal finance, inertia is the worst kind of habit. Postponing financial decisions, delaying thinking about important matters such as retirement, or taking things for granted like funding your child’s education or marriage are all types of behavior that hurt.

Unless one applies some focus to “get the task done” things always linger. Ultimately, the only loser is the person who procrastinates.

All of us lead busy lives and often can’t take time out to attend to our finances. Whether its something as mundane as paying our bills and EMI on time, or something bigger like planning for a house purchase a few years down the line, you have to seize the moment – its not just time for Africa, it’s time for you to take care of your personal finances.

Past performance is no guide to future performance. Two of the worst performing teams in this World Cup were France and Italy.  The stock markets are very similar. Past performance is no guide to future performance in the markets. Yes, this is a statutory warning that we all see on advertising for NFOs and equity offerings, yet most of us seem to ignore this because we are usually too optimistic about the future. Always remember to keep your thinking fresh. Understand the context within which you are investing to see if you are not falling into the trap of extrapolating past performance into the future.

In the investment world, there are times when there is a lot of hype surrounding certain sectors or stocks. History has shown that these are the areas that inevitably end up underperforming – for instance, who can forget tech stocks from the tech bubble years or real estate stocks from just before the global financial crisis occurred.

In fact, a tried and tested way to earn returns is to invest in the neglected and non-consensus sectors and stocks that are being ignored by the vast majority of investors in the market. Numerous experts give their definitive views on which way the market would move the next day.  Professional investors, just like professional footballers, have habitually learned to ignore the background noise. They recognise that the market is full of distractions. We also need to block all the surrounding noise in the stock market.
Reuters

Comments (+)