Phil Patient
Back in 2003, as greats like Pete Sampras and Andre Agassi were nearing the end of their careers, a new name was etched onto a major tennis trophy for the first time. That year, Roger Federer beat Mark Philippoussis to win Wimbledon and begin a new era in men’s tennis, one ruled by the so-called “Big Three”.
Fast forward to 2024 and after two decades of dominance, Federer has bowed out and Rafa Nadal recently announced his own retirement. Novak Djokovic, meanwhile, has faced mounting speculation about his future in the game after the first season since 2017 in which he failed to win a major title.
With the Big Three era now at an end, now is the perfect time to ask some important questions. Questions like: What lessons can these incredible players teach about equity investing and your retirement?
Keep reading to find out.
Balancing risk and reward on court and in the markets
As with any professional sport played by athletes at the very edge of what’s humanly possible, both mentally and physically, tennis is a game of risk and reward.
Try too hard to force a service game and you could hit long, leaving yourself open to an aggressive second-serve return. Charge for the serve-volley, meanwhile, and you might get lobbed.
A game of tennis is a constant re-evaluation, involving an infinite number of split-second decisions on which games, championships, and careers can turn. Your investment portfolio might not be quite that hands-on or high-risk, but the challenges are comparable, albeit stretched over the years of your investment term.
You need to think about where your portfolio’s strengths and weaknesses lie, where subconscious biases might sneak in, and when the reassuring word of a coach or adviser might help to clear your head, preventing any emotional decisions or knee-jerk reactions. Home or endowment bias, for example, might see you tempted to hold on to underperforming stock, while the latest headlines and high-profile trends might lure you off track.
Federer, Nadal, and Djokovic brought individual personalities, temperaments, and skills to the game. Each knew their own risk profiles, preferred strategies, and measures of success. We help you to understand yours.
Small wins and marginal gains can add up over the course of any career
Roger Federer is arguably the greatest male tennis player of all time.
He holds records for the most Open Era grass titles (19), including an all-time record number of Wimbledon titles (8), and a record for consecutive Wimbledon finals reached (7), achieved between 2003 to 2009.
Between 1998 and 2022 he won 80% of all clashes. Interestingly, though, statisticians will tell you that he did so with a point success rate of just 54%. That’s an incredible conversion rate!
It’s also a great lesson for investors.
Federer understood that he didn’t need to win every single point. He didn’t even need to win more points than his opponents. In 2009, Federer beat Andy Roddick to the Wimbledon final despite winning fewer games (38 to 39). He might have won fewer points, but he won the ones that mattered.
Investment isn’t a race. Success isn’t measured by reaching your goal as quickly as possible. Rather, it’s measured by arriving at your goal within your time frame while taking a level of risk that you’re comfortable with.
That means avoiding trend-chasing or obsessing over timing the market and staying focused on your goal. If your career is your route to the grand slam then your retirement date is your Championship point. Focus on that.
Your retirement date needn’t be set in stone but knowing your number and when you have enough is key, working after that is really a choice!
As you near the end of your career, you’ll likely have had your retirement plan in place for decades, but the timing remains flexible.
Changes to the economic environment, your personal circumstances, or legislation and tax law could all influence the exact moment you decide to call it a day. A robust plan gives you that freedom.
Through regular reviews, we can help to ensure your plans remain on track. Whether that’s a business exit strategy, a move into a consultancy role or a more traditional cliff-edge retirement, we provide reassurance and help to decide on the perfect time for you.
While Djokovic looks set to continue, in the short term at least, and Andy Murray’s hand was forced through injury, Federer and Nadal retired at the top of their game, and on their own terms.
As is only right they’re making way for the next generation of world leaders, with Jannik Sinner, Alexander Zverev, and Carlos Alcaraz currently staking their claim to be the next best men’s players in the world.
Get in touch
To find out how we can help you manage your investment and make sure you remain on track to your grand slam retirement, please do get in touch. Sadly, if you are after tips on your top spin forehand or back hand slice, I’m not your guy, tennis obsessed as I may be!
Contact us online or call 020 7400 4700.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The value of your investments (and any income from them) 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. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
