Investing Tips From the NBA Finals

Success is always worth studying. Take the example of this year’s two best NBA teams, the Oklahoma Thunder and the Indiana Pacers. Their march to the league finals offers several corollaries to sound investing.

Both squads feature extraordinary players, but that’s only a piece of the success puzzle. The teams also have strong owners, management, coaches and support staff dedicated to helping those players maximize their potential. It’s the same at AMG, where we all work tirelessly helping our extraordinary clients achieve their goals.

Still, winning takes more than talent and organization, just ask the coaches. They will explain the importance of a solid game plan, resulting from countless hours studying each opponent’s strengths and weaknesses, looking for trends that will help chart the best strategy for success. Again, AMG does the same in developing each client’s individualized financial strategy. The opponent is an uncertain world, and within the constraints of each client’s resources, we consider the economy, the investment environment and often-punishing tax laws to devise a winning game plan tailored to your needs.

In the NBA, even the best game plan can fail without a strong defensive effort to stop, or at least slow down, the opponent and possibly create opportunities for some fast-break buckets for your team. That requires a team effort and steady resolve. In the financial world, playing defense means protecting the client’s assets, guarding them against adversity while still looking for opportunities for profit—the investor’s fast break. By thoughtfully creating a diversified investment strategy, clients hedge against a severe downturn in one asset class with investments in other classes that could well flourish in turbulent times.

The very best game plans take advantage of the varied skills of a team’s athletes. Some players are ball-handling wizards. Others are deadeye shooters from the three-point line or high-jumping dunkers. And some play suffocating defense. This sounds like finding the very best investment options or fund managers when developing an investment portfolio. None of them are the same. Each has their unique skill set, which helps create a well-diversified portfolio.

Coaches will also tell you that calling time-out can change a game’s momentum, especially when the game plan isn’t working like it should. It’s an effective strategy that investors can and should use from time to time. For example, you could call a time-out to alter your investment strategy when economic momentum changes due to domestic or international issues, when new tax laws require updated tax planning or when your life priorities change.

Many experts say the difference between winning and losing in the NBA Finals often depends on each team’s bench strength—the overall skill of all your players. At AMG, we personify this concept. From top to bottom, we are professionals—eager to play the game and dedicated to helping our clients win.