The Beautiful Game Plan (or From Pitch to Portfolio?)
Last month, my husband and our boys made a quick trip to Dallas to watch Argentina take on Austria. They happened to be sitting in the Argentinian supporters’ section—which they described as absolutely electric. Even better, they were there to watch Lionel Messi score the goals that first tied and then surpassed the World Cup record for career goals. Seeing one of the greatest players in history continue to add milestones to his legendary career made for an unforgettable afternoon.
Since they returned home, we’ve been a World Cup household. If there’s a match on television, chances are one of us is watching. Dinner conversations have revolved around spectacular goals, controversial referee decisions, and arguing who the GOAT is (Ben thinks it is Ronaldo, Ethan thinks it is Messi…). It’s become unexpected family time—Melanie commented that she is loving all of the World Cup coverage since it is the one thing that we can all sit down and enjoy together!
As we’ve watched the tournament unfold together, I couldn’t help but notice how many parallels there are between successful soccer teams and successful investors. On a recent call, J.P. Morgan’s Dr. David Kelly made a similar comment, and I thought it was a wonderful framework. The longer I thought about it, the more I realized that winning on the soccer pitch—and succeeding as a long-term investor—both come down to balancing three simple principles.
Play Offense
No matter how talented a team’s defense may be, someone eventually has to score. You don’t win the World Cup by simply preventing goals—you win by putting points on the board.
Investing works much the same way.
Many investors naturally gravitate toward what feels safe. Cash, money markets, CDs, and short-term bonds all serve an important purpose in a financial plan, particularly for emergency reserves or upcoming spending needs. But over the long run, playing only defense carries its own risk. Inflation quietly erodes purchasing power, meaning money that appears perfectly safe today often buys less tomorrow. We’ve written before about ways to hedge against inflation, though as that piece explains, there’s no perfect solution.
One of my favorite charts from J.P. Morgan illustrates this remarkably well.
Source: JP Morgan’s Guide to the Markets
Over the past three decades, $10,000 invested in cash has barely maintained its purchasing power after inflation. Meanwhile, the same investment in stocks has grown dramatically. The lesson isn’t that every dollar belongs in the stock market. Rather, it’s that long-term financial success requires growth. A portfolio that never takes thoughtful, calculated risk may feel comfortable in the short run, but over time it risks falling behind one of the biggest opponents every investor faces: inflation.
Just as a soccer team eventually needs to attack, a successful investment plan should own assets that are capable of creating long-term growth.
Defense Matters
Of course, every soccer fan knows that offense alone doesn’t win championships.
A team can score three goals, but if it allows four, the result is still a loss. Great teams understand the importance of protecting their own net, and thoughtful investors should think the same way.
Defense in investing doesn’t mean avoiding risk altogether. Instead, it means managing risk wisely through diversification. Growth assets like stocks create long-term wealth, while high-quality bonds often help reduce the impact of difficult markets and provide stability when uncertainty rises. As we explored in Diversification: Free Lunch Anyone?, true diversification means spreading your risk across several asset classes, not just holding a lot of different funds.
History demonstrates why that balance matters. Adding another asset class, like bonds, to a portfolio has been a defensive move, historically lessening the impact of a severe decline in the stock market. Nice save!
While diversified portfolios don’t eliminate market declines, they help to shorten the time required to recover from significant market drawdowns. That’s particularly important for retirees and those approaching retirement, who may need to draw income from their portfolios even while markets are struggling.
Defense isn’t designed to outperform offense. Its purpose is something far more important—it helps investors stay in the game long enough for the offense to do its job.
Stay Onside
Onsides is one of those notoriously tricky soccer rules…as fictional soccer coach Ted Lasso said: “It ain’t easy to explain, but you know it when you see it.” Basically, the players on the offensive team are out of position and are penalized.
What’s fascinating is that many players don’t end up offsides because they made a reckless or intentional decision. Often, the defensive line simply moves forward, leaving an otherwise well-positioned player suddenly out of position.
Investment portfolios can drift the same way.
Most investors don’t intentionally wake up one morning and decide they’d like substantially more stock market risk than their financial plan calls for. Instead, markets move. After several years of strong equity returns, a carefully balanced portfolio can quietly become much more heavily invested in stocks than originally intended—not because the investor changed strategies, but because success itself changed the allocation.
This chart shows exactly how that can happen.
A portfolio that began as a traditional 60/40 allocation several years ago has gradually drifted to nearly three-quarters stocks simply because equities have outperformed bonds. Left alone, the portfolio now carries considerably more risk than the investor originally intended.
That’s why rebalancing is such an important discipline. It’s not about predicting the next correction or trying to outsmart the market. It’s simply about occasionally moving your players back into position so your portfolio continues to reflect your long-term game plan. We dig deeper into why finding the balance in rebalancing matters in an earlier post, and NerdWallet outlines several practical ways to rebalance a portfolio if you’d like to explore the mechanics further.
The Final Whistle
Sports analogies may be well-worn, but there’s a reason they endure. They have a unique ability to simplify complex ideas and remind us that many of the principles that lead to success in competition also apply to life. In this case, the best teams don’t rely solely on offense or defense, nor do they abandon their strategy when the momentum shifts. They remain disciplined, they trust their preparation, and they make thoughtful adjustments throughout the match.
The same principles apply to investing.
A successful portfolio should pursue enough growth to stay ahead of inflation, include enough defense to weather inevitable market downturns, and be rebalanced often enough to avoid drifting out of position. None of those ideas are flashy, but over decades they can make an enormous difference.
Enjoy the final games this week!
