It’s a week into the World Cup and I would say that it has been a pretty entertaining one with upsets and drama aplenty. With round 2 of Groups A to F played, only France has qualified for the play-off stage and host Qatar definitely will end their journey in the group stage. The remaining teams will all go into last round fighting for their chance to continue in the tournament. Making small bets for the games made watching the games a bit more fun. And there are definitely some parallels in soccer betting to investing.

Be responsible and discipline

Recognise that money bet can be lost completely, so budget for this entertainment. I have limited myself to $200 for the group stage and keep each game bet at around $20. Similarly, proper asset allocation is important in investing. While the likelihood of complete loss in investment is much lower than soccer betting, individual equity is still a riskier asset class. So invest with money that you do not need to use in the next 3 to 5 years.

Diversify to protect the downside

Saudi Arabia beat Argentina, Japan beat Germany and England drew with United States after hammering Iran 6-2. The ball is round and nothing is certain. There are multitude of factors that can affect the outcome. Same thing can be said about investing. So no matter how confident you are of your investment thesis, do not go all in. Diversify to reduce the downside due to random happening.

For last night match between Belgium and Morocco, I was confident that Belgium will win and placed my bet with the team. As it turned out, it’s another upset and that Morocco beat Belgium 2-0. Luckily for me I also bet on 2 goals, so I did not make a loss for this game.

Just need to be right some of the time

Thus far I have made 25 bets on 9 games and only got it right 7 times! That’s a win rate of a mere 28%! However despite the low win rate, my return is still 42% to the north (dropped to 25% after this morning’s games). Of the 36 counters I have in my 3-year portfolio, only 20 are in the green but I am still getting a reasonable return over the past 3 years.

Contrarian often gives the best return

My top two returns came from betting 0 goal for England-US and Costa Rica beating Japan. The first gave a 12x return, while the second gave a 6x return and that have help with the overall positive return. Similarly for investment, some of my biggest return came from small and micro caps and turn around companies. Some examples include Kingsmen Creatives, Best World and iFAST.Allocating a small portion of the portfolio for smaller companies with good potential may give a boost to portfolio’s performance.

Still different

While there are parallels between soccer betting and investing, they are definitely still different. One is gambling where we have no control of the money after the bet is placed and each bet is a one-off event in which the risk is a total loss of the capital. On the other hand, with proper diligence, it is unlikely that you will completely lose your capital even if you make a wrong judgement. Also, while the short term fluctuation in portfolio value might look similar to soccer betting, a well constructed portfolio is likely to provide a good return in the long term.

Enjoy the rest of the World Cup and may luck shine on you!