London 2012 Olympics: Three Lessons For Investors

We all fall into our comfort zone, no matter the subject. But there are some lessons investors can learn from this year's Olympics.

The 2012 London Olympics are underway, providing thrills to viewers worldwide.

I confess to being a casual fan; one who becomes "hooked" for a few weeks before ignoring the majority of sports for the next four years.

There are parallels to my professional world.   As an advisor to successful families, I have participated in client meetings with attentive people I am convinced leave our office, head home and use their performance reports to line the bird cage.

We all fall into our comfort zone, no matter the subject.  But there are some lessons investors can learn from this year's Olympics:

1) Despite Twitter, none of us has a crystal ball.   The 2012 London Olympics have been coined the "Twitter Olympics" for the prominent role of social media.  For example, the nearly 10 million tweets during the opening ceremony surpassed the total for the entire 2008 Beijing Olympics.  Television networks always face the dilemma of reporting an event live through various time zones.  The instant nature of the Internet makes avoiding "spoiler alerts" nearly impossible, yet NBC's ratings are strong despite the fact that most of us know the results prior to tuning in.

As investors wouldn't it be great to "know the score" before the market opens? Despite efforts by countless analysts and commentators to predict the future most come up short.   When building and managing an investment portfolio, the only "sure thing" is the past and none of us has a crystal ball.

2) In sports and investing it pays to start early. Watching 16 year-old Gabby Douglas and her U.S. gymnastics teammates capture gold is amazing, as is the remarkable U.S. swimmer Michael Phelps record 22 medals, 18 gold.  Both began their Olympic quest at a young age; Phelps began competing at age 7 and set his first world record at the age of 15.   Watching my 5 year-old daughter bounce around our bedroom mimicking a floor exercise routine I couldn't help but wonder, are we already behind?

The same can be said for investing, where "early starts" are also rewarded.  Putting away money early and often can lead to a bigger nest egg and the avoid the need to play catch up.  Sadly, most Americans are badly behind on the savings front.   A recent study indicates that the average retirement savings for those over 55 averages $130,000.

3)  It pays to diversify and be "in the team picture." The Olympics are a global event where joy comes from participating as much as winning. Everyone wants to walk away with a medal, but becoming an Olympian is a remarkable feat.

The same can be said for investors in our global economy. A well diversified, disciplined portfolio will leave any investor in elite company. It's not about winning gold as much as making the team.

Are you watching the 2012 London Olympics?  Do you see any lessons for investors?  I would enjoy hearing from you.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.


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