By Brett Shaver

Published October 28, 2024

I am one of the 30 million people who play fantasy football. I am a tad obsessed and play in three leagues with Bucknell alums, former BlackRock colleagues, and family. I enjoy the banter amongst friends, competition, and the many parallels with investing. I particularly love the auction draft, where you have a $100 budget and need to construct a roster of 15 players across the various positions (Quarterback to Defense & Special Teams). The process is similar to constructing a portfolio:

  • You have unlimited equity research resources and ideas (comparison fantasy football websites) to purchase a limited number of investments (players). The combination of effort, instincts, and experience differentiates you from the competition.
  • You want to build a portfolio (team) that can weather volatility (injuries). When an investment’s outlook changes or a better option emerges, you replace the investment from an investment list (waiver wire).
  • Knowing your client (league rules) is critical to maximizing a portfolio’s (team’s) investment returns (points scored). Different clients prioritize growth and income and handle market gyrations differently, while different leagues may reward big plays with bonus points or score points per reception.
  • No matter how prepared you are or how confident you are in your investments (team), short-term performance is unpredictable and out of your hands. Managers have to be resilient and not overreact.

 

Below is a link to a fun read from Hartford Funds. The comparison of fantasy football to factor investing may be a bit of a stretch. Still, their explanation of investment factors is solid investor education. I agree with the concept that you wouldn’t want to draft a team of only a certain type (factor) of players, like hyped rookies or aging veterans. Princeton Global’s managed individual stock and exchange traded fund (ETF) portfolios incorporate a variety of factors to provide diversification and risk management. Exposure to factors is not the key determinant in our portfolio construction process. However, we inherently favor the Quality factor and investments with the combination of Value & Momentum characteristics.

Please wish the Crabcakes fantasy football franchise and Ravens good luck this year!

Brett

Hartford Fantasy Football

Share

Ready to get started? We’re with you.