For money managers and the financial press, this is the season for predicting the year ahead and celebrating (or making excuses for) their 2013 performance. If you listen to the experts as you plan an investing strategy for 2014, you’ll hear: “It’s all about blocking and tackling,” or, “We’re playing defense going into Q1...” The football metaphors play right into the image of professional investors as tough guys on the financial gridiron. You need to be nimble and ready to change your game plan on a dime (or a nickel). You’ve got to pay up for top talent in order to compete with deep-pocketed teams. And, of course, at the end of the day, the whole point is to win.
Investing, however, is nothing at all like football. There are few better ways to destroy wealth than to change your game plan every time Mr. Market lines up in a different formation. With investing, cheaper is actually better. And trying to win has been proven to be a loser’s game—in fact, by always playing for the tie, you’ll end up far ahead of the competition over the long term.
The football metaphor is useful because it reminds us of the source of so many investing mistakes: the idea that if you have enough skill and grit you can triumph. Skill and grit are necessary for getting a promotion, fixing a leak under the sink, and helping your girlfriend achieve orgasm. But they can be counterproductive in your retirement account.