A Year in Investor Behavior...World Cup Edition

The FIFA Women’s World Cup recently started in June, and like many former players and crazed soccer fans, my eyes have been glued to the television for every game. Their recent win against the Thai team, a whopping 13 - 0 victory, was an unusual type of game. Typically each game looks about the same, and can be at times predictable.

A usual soccer match starts out fast. The excitement of a big game creates an adrenaline rush in the players, providing a faster game in the first 20 minutes or so. Typically, one team will score at the very beginning, attempting to set the pace for the rest of the game. As time goes on, things start to relax a bit. Players fatigue, the pace has been set, and frankly, things start to get chippy. You might see a few yellow or red cards (penalties), the players start to argue with the referees about blown calls, and the players become restless waiting for the next push in the game. Finally, the game is about to come to a close and both teams are racing to the finish, attempting to outscore each other and become the winner of the match. The match typically ends like it starts, full of adrenaline, rushed decisions and excitement.

The outline of a soccer match has many similarities to investor behavior during a market year. This year’s first quarter we experienced benchmark returns upwards of 10%, higher than normal, and investors buy in on the excitement! Now that summer is upon us, investor behavior can become less than ideal. Although investors won’t receive yellow or red cards in their poor investing decisions, we find that the “summer slump” in investing is typically due to investor disinterest. It is summer after all, people have more important things to focus on. At the end of year, investors ramp up their activity again and end the year with a bang, executing tax-driven sales before the new year begins.

Now that July is here, we’ve reached half time. Although we may be in the “summer slump” season of investing, now is not the time to make rash, emotional decisions, but rather think long term about your portfolio. As your investment adviser, we’re here all summer long to help guide you towards making informed investing decisions through the entirety of your market match, without those dreaded yellow cards.


Past performance is no assurance of future results. Iowa Wealth Management is a registered investment adviser with its principal place of business in the State of Iowa. Opinions expressed are those of Iowa Wealth Management and are subject to change, not guaranteed and should not be considered recommendations to buy or sell any security.