What can Gareth Bale Teach Investors?

Posted by: Swindells FP, on September 6, 2013.

Tottenham Hotspur has sold its star player, Gareth Bale, to Real Madrid for a world-record €100m. Even in the profligate world of elite football, that’s a staggering sum of money. Just how much is illustrated by Tottenham buying seven players, for about the same amount of money, to replace him.

Although Bale was outstanding last season, Spurs knew that the talent of one player is fragile. So despite watching their best player depart, many of the club’s fans are pleased with the club’s transfer activity.

There are parallels in investing.

Three years ago, Gareth Bale was a useful and promising squad member with a specific and well-considered role in the team. His manager might have been delighted with his improvement as a player but worried that the team was becoming too reliant upon his individual performances.

In the same way, each asset in a portfolio should have a well-considered role and, just as White Hart Lane held its breath every time Bale rolled around clutching his shin, investors should worry when an asset does well and begins to dominate the overall performance. How Tottenham handled the sale of its top player is rather like how a good adviser manages the changing values of the investments in their clients’ accounts. They make a cool-headed decision about the right balance of assets for their clients and, when the rising and falling value of the funds alters that balance, periodically bring it back to the point they think is right.

A football club’s chairman makes a difficult decision to release a player that is performing brilliantly, just as advisers make counter-intuitive decisions to sell assets that are performing well. 

Spurs fans are optimistic because their club’s activity in the transfer market rebalances the team and might increase the chances of reaching the clubs goals at the end of the season. The periodic rebalancing of client’s portfolios is intended to do the same, albeit with a longer time horizon.



Enter your email

Get free investment, pensions and wealth management news and advice.

* indicates required

*We will never share your details with any third party.


Client Stories

Book a consultation

Your Name (required)

Email (required)

Phone Number


Employment Status


What you would like to talk about?


Enter exactly what you see above

Enter your email to receive free relevant news and updates.

* indicates required

*We will never share your details with any third party.

Latest… View all

Putting the current stock market decline in context

There’s no doubt hyperbolic headlines depicting the recent falls on the world’s financial markets are potentially anxiety-inducing. With the FTSE 100 Index falling to its lowest level since April 2017, the effect of the headlines is to promote a sense of uneasiness; we’re here to remind you that this shouldn’t be the case. Instead of […]

Read more →

Inheritance Tax is an avoidable tax

It is often said that Inheritance Tax is an avoidable tax, but many of us somehow fail to avoid it. Why is this? In our experience, clients’ failure to plan effectively is a result of the following perceived problems: Speed – How often will the thought of having to survive 7 years from the date […]

Read more →

What went wrong with the forecasts?

Reading the tea leaves Investors at year-end are inclined to reflect on the 12 months gone and muse on what the coming year might bring. Aware of this appetite for speculation, themedia tends to feed it with forecasts. These articles can be fun to read, but are even more so a year later. In January […]

Read more →

What should investors make of bitcoin mania?

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional money, no paper notes or metal coins are involved. No central bank issues the currency, and […]

Read more →