March Madness and Investing: Winning Strategies for Your Bracket and Portfolio

What March Madness Can Teach Us About Investing

March Madness is right around the corner, bringing with it the excitement of upsets, underdogs, and unexpected blowouts. Just like investing, filling out a bracket requires a careful balance of risk, reward, and strategy—while still leaving room for a little luck. As we dive into the chaos of college basketball’s biggest tournament, here are some valuable investment lessons we can take from the madness.

Lesson #1: Forget Perfection—Focus on Strategy

The odds of crafting a perfect bracket are astronomically low—just like the odds of consistently picking top-performing investments. That doesn’t mean you shouldn’t aim to make smart choices, but rather that success lies in strategy, not perfection.

In investing, controlling what you can is key. A well-structured portfolio should be positioned to capture return premiums, such as size, value, or profitability, which can enhance long-term returns. Other controllable factors—like asset allocation, minimizing costs, and managing taxes—also play a crucial role in achieving financial success.

Lesson #2: Past Wins Don’t Guarantee Future Success

Many fans rely on past tournament performance to guide their bracket choices—but history has shown that dominance doesn’t always last. The same holds true for investing: just because an asset or fund performed well in the past doesn’t mean it will continue to do so.

Luck can play a significant role in short-term outcomes, both in basketball and investing. While skill certainly matters, it’s often difficult to determine whether a winning streak is due to expertise or chance. Historically, many investment funds that outperform the market in one period tend to underperform in the next. Instead of chasing past winners, focus on a well-diversified strategy backed by solid fundamentals.

Lesson #3: Overwatching Leads to Overreaction

The more you watch the tournament, the more emotionally invested you become—cheering for every shot and agonizing over every loss. While this makes for an exciting March Madness experience, a similar approach in investing can lead to unnecessary stress and poor decision-making.

Constantly checking the markets can make investors more prone to impulsive moves, often selling in panic or buying in euphoria. The best investors detach themselves from daily market fluctuations and focus on the bigger picture. Successful long-term investing, like a well-built bracket, requires patience and discipline.

Lesson #4: Don’t Let Emotions Drive Decisions

It’s easy to let personal bias influence bracket decisions—like advancing your alma mater further than logic suggests. Similarly, investors often fall into the trap of seeing patterns where none exist or making choices based on gut feelings rather than data.

Effective investing relies on evidence-based strategies rather than emotional reactions. Sound decision-making protects against common psychological pitfalls, like misinterpreting probabilities or chasing trends. By staying disciplined and relying on research rather than instinct, you improve your chances of long-term success.

Lesson #5: A Great Coach Makes All the Difference

Every great team benefits from strong coaching—someone to guide, strategize, and keep emotions in check. The same is true in investing. A skilled financial advisor acts as a coach, helping you navigate market volatility and keeping you focused on your long-term goals.

Advisors provide a critical buffer against emotionally charged decisions, helping investors avoid the common mistakes of chasing returns or fleeing during downturns. While crafting a March Madness bracket is all in good fun, building an investment portfolio comes with real financial stakes. Before making major decisions, consider consulting a trusted financial professional.

This March Madness, enjoy the excitement, but remember—investing isn’t about chasing perfection, reacting emotionally, or dwelling on past winners. It’s about strategy, patience, and having the right guidance to keep you on track.