March Madness Winning Principles for the Financial Advisor

Lessons in Investing from March Madness for the Financial Advisor

Financial Advisor March Madness LessonsWhen the NCAA Basketball tournament rolls around every March, it becomes the hot topic of discussion and the subject on the minds of many. Hundreds, if not thousands of collective hours are spent carefully selecting bracket pool entries that lead a lucky few to glory at the end of the season. There is often a method to this “March Madness” bracket planning and these principles can be carried over to other areas of life such as financial planning, investing, and wealth management. Let’s take a look at some of these March Madness investing lessons for the financial advisor:

1. Mix it up

This financial advisor lesson goes all the way back to the basics. Diversify! It makes just as much sense in your bracket as it does in your portfolio. While it is wise to fill your bracket with high-profile programs like Michigan State and Kentucky, it’s also good idea to throw in a few up-and-comers. After all, isn’t it usually the emerging, small-cap stocks that have the biggest returns?

2. History doesn’t always repeat itself

What may be true for things like war and fashion does not typically apply to basketball and investing. In the last thirty years, there have only been two teams to win back-to-back championships – Florida in ’06 and ’07 and Duke 15 years earlier in ’91 and ’92. In the perpetual tournament that is the financial market, this is equally true. Investing success does not repeat itself in any way, shape, or form that is measurable and predictable.

3. A little risk can go a long way

Just like with investing, you could pick your favorites, or this season’s shoe-ins to fill your bracket. However, tossing in an underdog or two could pay off big. It certainly has paid off before and a measured amount of risk is sometimes worth taking, as long as it is limited and well-thought-out.

4. Home court bias is real

Let’s face it. We are always going to favor our alma maters and home town picks. Just like in our brackets, many portfolios reflect the familiarity with local companies and home country brands. While it may be a hard habit to break, it is wise to look at potential picks – in your bracket and your portfolio – with an unbiased perspective. You may have missed a promising stock from another country because, let’s be honest, you weren’t even looking beyond your back yard.

5. Experience matters

In basketball, we see this time and time again. Teams with key players from a previous season typically tend to do better throughout the next season as opposed to teams with fresh faces. Experience goes a long way through navigating not only a season of basketball, but also the tricky waters of investing. Time and experience gives financial advisors and basketball players alike the opportunity to learn from mistakes of themselves and others.

6. A little luck never hurts!

What have we learned so far? We know that just like outcome of the NCAA season, the financial market is difficult to predict and is full of bias and surprises. Even though experience and smart thinking goes a long way, sometimes it is dumb luck that separates the winners from the losers. Avoiding mistakes and unnecessary risk can take both a financial advisor and basketball player far, but we all know that one lucky bounce can change everything. Here’s to hoping it’s in your favor!

March Madness pools are fun and losing won’t put you back much. But with investing, the financial advisor must use as many winning principles as possible that will lead to long-term success!


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About Summit Brokerage Services, Inc.

Summit Brokerage Services is part of Cetera Financial Group. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.


About Cetera Financial Group

Cetera Financial Group® (“Cetera”) is a leading network of independent retail broker-dealers empowering the delivery of objective financial planning advice to individuals, families and company retirement plans across the country through trusted financial advisors and financial institutions.  Cetera is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.

Through its multiple distinct firms, Cetera offers independent and institutions-based advisors the benefits of a large, established broker-dealer and registered investment adviser, while serving advisors and institutions in a way that is customized to their needs and aspirations.  Independent financial advisor support resources offered through Cetera include award-winning wealth management and financial planning and advisory platforms, comprehensive broker-dealer and registered investment adviser services, practice management support and innovative technology.  For more information, visit

*”Cetera Financial Group” refers to the network of retail independent broker-dealers encompassing, among others, Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities, The Legend Group and Summit Brokerage Services.

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