The Garrulous Jay – The Perseverance

I watched the England vs. Argentina match in a pub called The Perseverance.

With hindsight it seemed an appropriate place to see the team’s fifteenth World Cup campaign since 1966 come an ignominious end. The gloom was only compounded by watching on screens that intermittently switched off and having ketchup split down my back.

As soon as the final whistle was blown the analysis of what went wrong inevitably began.

Much of the blame has been laid at the feet of the manager, Thomas Tuchel, for his decision to “shut up shop” (as Sky News put it) after England had scored in the 55th minute.

This ignores three important points:
•    After England scored Harry Kane confirmed that the message from the manager was to push on and press for a second and, to that extent, it was the players’ reaction to going ahead and not the manager’s instructions that were at fault.
•    Tuchel actually gave the team seventeen minutes to try to rediscover their momentum and reassert themselves on the match before bringing on an additional defender.
•    A further ten minutes passed, throughout which England were on the ropes but still leading, before two further defenders were added (to a great cheer in The Perseverance), in an effort to see out the game.

Alas they were up against a team that seems to relish the challenge of coming from behind and the rest is now football history.

Watching another failed England campaign got me thinking about investing.

Football is full of short-term noise. A team can dominate possession and still lose. A lucky deflection or ill-timed tackle can change everything. One poor performance (Ghana) doesn’t define a campaign, just as one great performance (Mexico) doesn’t guarantee success.

The teams that consistently achieve the most are usually those with a clear philosophy, patient management and the discipline to stick to a long-term plan, even when performance fluctuates.

Investing is remarkably similar.

Financial markets are full of daily headlines designed to provoke a reaction. It’s tempting to believe that every piece of news requires us to act. Yet history shows us that the most successful investors are generally those who resist this temptation.

Just as football supporters shouldn’t judge a team solely on one match, or even one tournament, investors shouldn’t judge their financial plan on one year of performance.

A well-diversified investment portfolio is built with the expectation that there will be periods of uncertainty. Volatility is simply part of investing. 

Similarly, when England concede a goal, nobody expects the manager to tear up the game plan immediately, and nor did Tuchel do this on Wednesday evening.

But by the 82nd minute, with England still ahead, it was clear that the team was rocking and a tactical change was required: a short-term measure intended to address a specific set of circumstances within the context of a longer-term approach.

Such tactical adjustments are also integral to good portfolio management.

The real value of any planning isn’t trying to guess what will happen next week…or next match. It’s creating a strategy that can withstand whatever next week or the next game brings while remaining focused on where you want to be in the long-term.

I hope Tuchel will stay on and, with perseverance, football will eventually “come home”.