The Wimbledon Championships is one of the four major tennis Grand Slams, and many regard it to be the most prestigious.

With a rich history dating back to 1877, Wimbledon is the oldest tennis championship in the world and is renowned for its traditions, including the all-white dress code for players, strawberries and cream, and matches played on grass courts.

As with all major sports tournaments, Wimbledon entails a panoply of emotions for both the players and the spectators – triumph, defeat, heartbreak, perseverance, agony, and heroism. It represents the full spectrum of human experience, and every domain of life can be interpreted through the gruelling battle between the two people on opposite sides of the tennis court.

So, with Wimbledon upon us, here are four lessons the All England tournament can teach you about financial planning.

1. You can expect to lose (a bit) on the path to victory

The 2008 Wimbledon final between Rafael Nadal and Roger Federer is widely regarded as one of the greatest tennis matches of all time.

Nadal was two sets ahead of his arch-rival before losing the next two sets, tying them on two sets each in the final set.

Nadal went on to win the final set and the match, which lasted nearly five hours in total.

Losing, or “dropping”, sets is a normal part of tennis, and players can expect to drop many on the path to victory. Indeed, vital to their success is their understanding that losing (a bit) and falling behind is to be expected every now and then.

Recognising that loss is a normal occurrence on the road to success is also an important part of financial planning and resonates with the theory of “loss aversion”.

The theory of loss aversion posits that humans feel the pain of losses twice as strongly as the pleasure of gains. So, investors often seek to minimise loss wherever possible, rather than seek out potential profits.

For example, if there is a significant dip in the market, you may be tempted to withdraw your holdings to minimise your losses. However, historically, the market has trended toward growth and has bounced back after dips.

Indeed, the evidence suggests that maintaining your holdings during volatility is a better strategy for long-term success.

This was recently seen when there was significant volatility in the US market in the second half of 2022, as the S&P 500 Index dropped more than 10% between August and October.

Such losses might have led some investors to exit. However, if those investors were not invested in January 2023 they would have missed out on 15% returns by early August.

History suggests that maintaining your investments and recognising that volatility and short-term losses are normal is crucial for long-term success.

So, just as Nadal and every other tennis player understand that they are unlikely to win every set along the way to victory, investors could do well to accept that losses are a normal part of the journey toward growth.

2. Goran Ivanisevic and the value of focusing on long-term goals

Goran Ivanisevic holds legendary status in the history of Wimbledon. He is the only singles player to win the tournament as a wild card, doing so in 2001 while ranked 125th in the world.

His unexpected victory is often included in lists of the greatest sporting moments in history.

Starting in 1988, Ivanisevic played at 14 Wimbledon championships before finally winning just a couple of years before his retirement.

Before his eventual tournament triumph, he is quoted as saying, “I might play in another final there and don’t want that stupid [runner’s up] plate for a fourth time. I am going to win Wimbledon one day – even if it is the over-40s doubles”.

Ivanisevic’s Wimbledon journey exemplifies the rewards of a long-term approach.

His story is a valuable reminder that persistence, resilience, and a forward-looking perspective are essential components of long-term success in any realm, including tennis and, of course, financial planning.

Long-term goals allow you to aim for a life that reflects your values and overall objectives. You can create a roadmap to guide your decisions and actions, ensuring that each step you take along the way aligns with your ultimate vision – be that retiring early, buying a new house, or winning on Centre Court.

3. A diverse and adaptable style can be beneficial

With nine wins to her name, Martina Navratilova has won more Wimbledon titles than any other player in history.

She is credited with adapting and revolutionising the women’s game by mastering the serve-and-volley format of playing at the net rather than the baseline.

Her adaptability was made possible by her elite athleticism and meant that others found her impossible to play against, which led to her domination of the tour in the 1980s.

The ability to adapt and play different styles of tennis is now integral for top-level players as it ensures their opponents cannot simply learn how to play against their style.

Just as Navratilova’s ability to adapt and play different styles made her unstoppable on the tennis court, diversifying investments across various asset classes, sectors, and regions can enhance your potential for long-term success and mitigate risk.

By spreading your investments, you can avoid concentrating your risk and navigate market fluctuations as well as capitalise on opportunities in different sectors.

This approach helps to protect you against dips in specific markets. It also ensures a balanced strategy that may be better equipped to weather economic uncertainties and deliver consistent returns over time.

Much like in tennis, where adaptability and versatility are key to victory, in investing, diversification is fundamental for achieving financial goals and securing a strong position in the ever-changing landscape of global markets.

4. Even the greats seek guidance from the experts

As with many sports, a tennis player’s coach is often key to their success.

A good coach can recognise the strengths and weaknesses of a player’s game and isolate their opponent’s patterns and style to find a way to play against them.

After success at a tournament, be it Wimbledon or otherwise, players are often quick to recognise the value of their coach, and even the greatest players draw upon the wisdom of their expert coaches.

Seeking guidance from seasoned professionals, whether in tennis or in finance, can be invaluable.

Just as a tennis coach can offer advice, strategic insights, and emotional support for their player, a financial planner can help you to navigate the market, achieve milestones, and build a life that reflects your values.

Both relationships highlight the importance of expertise, trust, and a collaborative approach in achieving long-term success and reaching peak performance levels.

To speak to one of our experts (in finance, not tennis), get in touch.

Email or call us on 01785 876222.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.