By Shaw Pritchett, President & Financial Advisor, Jackson Thornton Wealth Management
Q: With the World Cup being played right here in the U.S. this summer, everyone’s picking a “winner.” Is picking the “winning stock” any different?
Great question, and the timing is perfect. As I write this, 48 national teams have descended on stadiums across the country for the 2026 FIFA World Cup, and by July 19 all of them, but one will have gone home disappointed. My office has become a running debate over who lifts the trophy at MetLife Stadium.
Here’s the thing every bracket-filler eventually learns, and it happens to be the single most important lesson in investing: the favorite doesn’t always win.
The favorites get knocked out, too.
Brazil has won five World Cups. Spain went into this year’s edition as the betting favorite, with France close behind. France has reached two of the last three finals, yet won only one of them, losing a heartbreaker to Argentina on penalties in 2022. Even the teams with the most talent and the shortest odds are one bad afternoon from going home. What if your investment account had to work like a sports bet? Would it make sense to wager a big chunk of your savings on a single team to win? That ups both the stakes and the stress. But what if I told you there was a way to guarantee you’d win your bet?
Now swap “team” for “stock.” Picking the one company that will win the next decade is exactly this hard. The names that look unbeatable today, the ones everyone is sure will keep winning, are the same ones that get upset when the game actually gets played. History is a graveyard of “sure things.” Kodak, Blockbuster, Sears and a long list of former tech darlings were once favorites, too.
Owning the whole field is how you guarantee you hold the champion.
Imagine you could make one bet that automatically paid off no matter which of the 48 teams won it all. You’d take it every time if you’d be guaranteed to own the winner. You can’t do that at the World Cup, but you can do exactly that in the market. It’s called diversification.
When you own a broadly diversified, global portfolio, you don’t have to correctly guess the next decade’s champion. You already own it, along with every other contender. Nobel laureate Harry Markowitz called diversification “the only free lunch in investing,” and this is why. You give up the bragging rights of having called the one big winner, but you also protect yourself from the far more common fate: betting everything on a favorite that gets bounced.
The takeaway.
Concentration or putting too much of your wealth behind a single team is the most dangerous mistake I see. It feels bold and confident. It’s really just gambling on sports with your retirement.
Hope you enjoyed the tournament and cheered as loud as you wanted for your pick. But when it comes to your portfolio, don’t bet the house on one team. Own the whole field, stay disciplined, and let the long game work in your favor.
Shaw Pritchett is President of Jackson Thornton Wealth Management, an independent, fee-only advisory firm serving clients across Alabama. Due to publishing lead times, this article was written in July as the World Cup was still being played.
Source: World Cup dates per U.S. Department of State (state.gov/fifa-world-cup-26). Pre-tournament betting favorites per The Athletic/New York Times and Yahoo Sports; 2022 final result (Argentina def. France on penalties) per CNBC.
