|
Root, Root, Root for the Home Teams
As a lifelong Wisconsin resident and sports fan, I follow our state’s “big four” teams – the Brewers and Bucks here in Milwaukee, the Green Bay Packers, and my alma mater, the UW Badgers.
Even if you’re not a sports fan like me, perhaps you’ve heard the Brewers mentioned on the news once or twice in the past few days. They're on the verge of doing something they haven't done in their 58 years of existence—winning a World Series championship.
The Bucks? Their season is just a week old, but they’re 1-3 and will likely take more losses as they begin rebuilding without a certain freak from Greece who requested—and was granted—a trade this offseason.
The Packers and Badgers are a mixed bag. With a 4-3 record, the Packers are winning but sit last in their division, and questions abound about what they can realistically accomplish this season. Similarly, the Badgers have a better-than-expected 5-2 record but are looking up at several teams in the conference, dimming hopes of a notable bowl-game appearance.
Back in 2010, situations were decidedly different. The Brewers finished with a sub-.500 record and didn’t even make the playoffs, while the Bucks made the playoffs (albeit with a first-round exit), the Badgers played in the Rose Bowl, and the Packers hoisted their fourth Lombardi Trophy.
In 2017, the Packers were now the ones with a losing record. The Brewers and Bucks both finished above .500, although the Brewers still missed the playoffs and the Bucks once again lost in the first round. Meanwhile, the Badgers went 13-1, won the Orange Bowl, and were ranked seventh in the country.
In 2021, all four teams had winning records, but losses during the season kept the Badgers out of a major bowl game, while the Brewers and Packers both bowed out of the playoffs early. But the Bucks captured their first championship in 50 years in dramatic fashion.
Rooting for just one of these teams can leave you dejected for a season—or even several seasons in a row—but an outstanding season by another can help make up for the disappointment.
The fortunes of all these teams rise and fall based on numerous factors, some within their control and others not. Roster construction, coaching staffs, injuries, and a host of other variables can lead to the thrill of victory or the agony of defeat.
The same is true of your portfolio. Putting all your hopes in one asset class can have you popping figurative champagne bottles when you open your year-end statement. But fortunes can change quickly, and today's champion can become tomorrow's cellar dweller.
That’s why diversification is such a powerful aspect of portfolio construction. You may have an asset class or two that has a forgettable run, but strength elsewhere in your portfolio can help cushion the blow.
Don’t hang your hopes entirely on the asset class that’s enjoyed a dynastic run, and don’t dismiss the one that’s been struggling to find its footing. You never know what the next financial season may bring, which underdog might surprise you, or which favorite might suffer a stunning defeat.
| 
