Tennis has become one of my favourite sports. As both a tennis fan and investment manager, I’ve noticed commonalities that can lead to long-term success. Today, I’ll highlight three key common factors between tennis and investing that stand out as success factors: mental preparation, discipline and practice, and technological improvement.
1. Mental Preparation:
Being mentally fit and healthy is an important factor for tennis, as well as for investing successfully. As a tennis player, it is the ability to accept that things don’t always go your way, to remain focused on hitting the high percentage shots, and allowing the odds to work in your favour.
- – For example, Serena and Venus Williams were known for their ability to not let mistakes get ruin their mental focus. Instead, they stayed focused on sound strategy, and let the years of their groundwork and experience tilt the odds in their favour.
- – In investing, this is understanding that there will be down times, but following a sound investment strategy, backed by research and measured decisions, will lead to long term success.
The study of sports psychology, and its use in professional tennis, has become essential for good reason; mental toughness and a healthy mindset can help you win more matches. Similarly, the study of psychology of investors is also important for success. Understanding how investors can emotionally react to events, and how to avoid doing so yourself, can give you an advantage.
Too often recreational players have the risk vs. reward calculation backwards. For instance, rec players (vs. the pros) often try to rip a highly improbable shot when they are in a defensive position to “get ahead”, when the better choice would be to play it safe, get the ball back in play and live to fight another day. In an investing context, this would be like when an investor has experienced losses and proceeds to take a highly risky bet to quickly get back to “even”, or to double down on their losing position. Often this will lead to a bigger loss. The correct move is to be patient, be willing to cut losses and move forward with a focus on future success.
2. Discipline and Practice:
Pure athleticism can help you win more tennis matches, but what I’ve learned as someone in my 40’s learning a new sport, disciplined practice can help make up for age! The tennis pros spend hours practicing and strength training, with dedicated coaching towards constant improvement to gain an edge on their counterparts. Fortunately, when it comes to investing, the past 120+ years of combined investing experience on our team also works in our favour with recognizing patterns and leaning on experience in past economic cycles to capitalize in the future.
- Smart tennis and Smart Risk Investing share a three-step process:
- – Recognize your opportunity
- – Analyze your options
- – Take action to capitalize on the opportunity with the best option
The lesson is to never quit trying to get better. We continue to refine our investment process by meeting with smart people, analyzing new data techniques, and researching better ways of find good investments and manage risk.
3. Technological Improvement:
Technological improvements in equipment like tennis rackets, string, and shoes have changed how players compete compared to 20 years ago. Trying to compete with old equipment leaves you at a significant disadvantage.
Similarly, today in the investing world our team at The Wong Group continually invests toward strong and reliable technology, data sources, risk management and analytical tools to maintain an edge, particularly in volatile markets.
4. Teamwork and Circle of Trust (bonus factor!):
Surrounding yourself with competent people who care and have your best interest in mind will help you as a tennis player, and as an investor, by constantly helping you improve, maintain a healthy mindset, and tailor your fitness/discipline/investment strategy for continued evolution.
What I’ve come to understand in tennis, investing and in life, when you are doing something you love, appreciate it and respect it by giving it all you can. Be grateful. Believe me, every time I step on court or invest for a client, I am. It’s a privilege to help you and our clients navigate the turbulent markets to find peace of mind and long-term financial success.