5 Lessons Fantasy Football Has Taught Me About Investing

I've played Fantasy Football and I've invested in stocks and let me tell you, there's a similarity between the two. Stocks, like football players, have a value and that value rises and falls over time. Here are five lessons that I've learned from "investing" in players on my fantasy team and how I apply those strategies towards the market.

1. Stay on top of your portfolio and adjust if needed - What's one thing that you absolutely must do every week in Fantasy Football if you want to have a chance? It's check and adjust your lineup before the games. Injuries and bye weeks are the two biggest gotchas that can kill you if you don't stay on top of them. Every week I plan at least two reviews of my team minimum to make sure who's able to play and who's not. Once early in the week, for bye teams and injuries (to see if I need to pick someone up), and another later in the week for game time decisions. Letting your team run without tracking its performance is only going to result in loses. The same is true with your investments. Don't buy something and forget about it, you need to make sure it's not slowing down over time due to "injures" with the company. Just don't fall prey to he next item.


2. Don't over-adjust your portfolio - Every league has a guy that drops and add players 2-3 times a week. The hot sleeper last week is the first addition to this guy's team and one off week from a player means an immediate drop from that team. What's the problem though? This person is never giving his team a chance to perform. He's picking up players that were probably not drafted by anyone and hoping that those players outperform the guys that everyone else is keeping. Adjustments are good for consistent poor performers but you have to give them a chance before you give up on them. The same can be said with stocks, time has shown that sticking with a consistent performer during a downswing can save the money that might have been lost had that stock been sold at it's low. Buy low and sell when it's high, not when its low, unless of course the stock is consistently under performing and you see no signs of improvement.


3. Penny Stocks can make you rich, but most likely they'll make you regret buying them - Every week there are so called "sleeper players" that are poised to have a big game. The great thing is that these players are probably available to pick up and put on your team. Just like penny stocks, everyone has an opinion or a "hot tip" that they know about. However, if the only basis for buying a stock, or picking up a sleeper is the fact that someone else recommends it, you could be in for disappointment. Most penny stocks fail and it's a very risky investment. More often than not sleepers rarely work out the way they should and it's up to the investor to do the research and make sure the pick up is worth the risk.


4. Know the competition, know the company - Each week I set a lineup based upon the best players I have on my roster, and the best match-ups those players have in terms of the teams they play. I may have a very good running back but if he's playing the number one defense in stopping rushing yards, I may consider other options that week. Also, during the drafts, if you are on the fence between two RB's that are pretty much the same in ability which would you prefer, the one who's team is focused on throwing or on running the ball? The point here is that a good player is affected by the strength of schedule and the rest of the players on his team. The same can be said for stocks. If there's a company that's looking good, how does it line up against the competition? What is the strategy of that company for the next few years and do you agree with it?


5. The "Experts" aren't always right - In fact they are quite often wrong. I've been burnt before where every so-called expert picks a player to have an insane day against a struggling team and he turns out to have 2 fumbles and barely any yards. There's a reason they call it "Any Given Sunday". No one can predict the future and even though there's less of a gamble with investing, there's still risk and at the end of the day you have to go with what you believe is the best choice. After all, it's your money.