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Hewison Insights

Football and Investing – patience is the key

Simon Curtain
Partner/Private Client Adviser
4 Nov 2010

Another year of football is over and this time Collingwood came away the (eventual) victor.

Magpie supporters are only too eager to point out they last tasted success in 1990, and as for the Saints; well they will have to wait yet another year to re-live the glory of 1966.

20 years for Collingwood and 44 years for St Kilda – that’s a long time between drinks and provides us with a great opportunity to demonstrate the benefits of long term investing.

We are constantly saying that you need to take a long-term focus when investing in growth assets like shares and property, as over shorter time period’s market fluctuations can dramatically affect portfolio values – as recently witnessed with the Global Financial Crisis.

Let’s assume that in 1990 a Collingwood supporter, riding high off the back of a Grand Final win, invested $10,000 into the share market and each year reinvested the dividends received. That money today would now be worth around $63,000 – a handsome return in anyone’s books.

The story is even better for a St Kilda supporter. If they had of invested $10,000 into the share market in 1966 and reinvested their dividends each year those funds would now be worth around $800,000!!

It’s important to point out that our St Kilda supporter, while waiting to taste Grand Final glory once again, lived through the Oil Crisis (1973), Stock Market crash (1987), Tech Wreck (2001) and most recently the Global Financial Crisis (2008 – ?). While each of these events rocked the world’s stock markets the end result, as we see, is a large profit.

While our long term supporters have been rewarded with solid returns the story is not so rosy for those that jump on and off the bandwagon. You know the type; cheering on their club through the good times but when times are tough nowhere to be seen. If these supporters applied the same method to their investment style they would be severely disappointed.

Suppose these bandwagon supporters tried to time the market by selling their investments when they thought things looked bad and buying back in as the market improved. Now suppose that in doing so these investors were ‘out of the market’ during the ten best performing months of the past decade. If this were the case our Collingwood and St Kilda supporters would end up with around $35,000 and $440,000 respectively. Almost half of what they would have received had they stuck to a long term buy and hold strategy.

So what can investors learn from loyal football supporters?

Even though there may be some pain along the way, if you stick with it, through thick and thin and maintain a long term view the returns will come.


Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.