Investing is A Lot Like Football - Both Need a Strong Playbook to be Successful

Investing is A Lot Like Football.  Both Need a Strong Playbook to be Successful.

By Lori Schock, Director of the SEC’s Office of Investor Education and Advocacy

With the Big Game just around the corner, it’s a good time to talk about how investing is a lot like football. Both need a strong playbook to be successful. To invest wisely, you should put together a special team of professionals so there is safety for your holdings and you can hand off assets to your family without stressing whether your investment is a coin toss

And if that’s not enough football references for you, read on.

It’s important to huddle with those involved in your future financial plans to identify goals.  Every investment plan should have a strong offense.  For your first down play, go to provides a game winning playbook on how to invest wisely and avoid fraud. You will be able to check to see if your investment professional is registered and see if they have been involved in any kind of illegal procedure, as well as find a variety of investment tools and resources.

As you kick off your financial plan, it is vital you keep in mind your level of risk tolerance.  All investments have some degree of risk. You can help yourself avoid a sack by understanding the different risks and returns of every saving and investment product you’re considering.

You need to have an equally tough defense in order to protect yourself against investment fraud.  Fraudsters often engage in high-pressure sales tactics, pitch too good to be true opportunities, promise guaranteed returns and rush you into making quick decisions.  Never make snap decisions on investments.  Call an audible and take a time out to research every investment opportunity before you invest.  Getting into the red zone is the place to be, so is checking out our red flags of fraud guidance.

Watch out for the blitz.  Celebrities are endorsing investments on social media, radio and TV.  Never make an investment decision based solely on celebrity endorsements.  Just because your favorite celebrity says a product or service is a good investment doesn’t mean it is.  You don’t want to get hit on your blind side so always conduct thorough, independent research of the product.

You may fumble or be offside here and there but you have a better chance of protecting yourself against financial devastation if you diversify your investments.  That way, if one of your investments loses money, the other investments can make up for it.  It’s just like spreading the risk by using a variety of plays in a playbook rather than using the same play over and over again.

Understand how fees and expenses affect your portfolio.  Some fees may seem small at first, but over time they can have a major impact on your investment game plan--just like throwing a pick six.  It’s also important to ask your investment professional about any penalties that could be incurred for selling an investment product before its maturity date.

All of these tips may seem hard to tackle.  However, you’ll score the game winning touchdown and be celebrating in the end zone (thank goodness you can do that again!) if you put together a strong investment playbook that includes setting financial goals, doing research and going to before you invest.

 The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This article expresses the author’s views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.