Mark Lister: All Blacks game plan for NZ investors

Things are bound to go wrong - stay calm and adapt as best you can. Photo / Getty Images

Opinion

Taking a punt off the field needs the same approach for success as the World Cup winners showed on it.

Following the Rugby World Cup win, business editor Liam Dann wrote a great piece discussing what the corporate world could learn from the All Blacks. In the unashamed interest of dragging out the celebratory sporting analogies a little longer, I thought I'd offer up a leaf or two that investors could take from our sporting champions' playbook.

Have a plan, and stick to it

The All Blacks wouldn't have got anywhere without a clear strategy of what they wanted to achieve, and the timeframe within which they intended to do it. To be successful, investors also need a plan.

This should include long-term objectives, the investment time horizon, income requirements, and the levels of risk an investor is willing to take on to achieve them.

But keep your cool when the plan goes off track

Something is going to go wrong on the day of the match, whether it's a yellow card, a crucial refereeing decision or an injury to a key player. Rather than panic, the All Blacks make adjustments and deal with these obstacles as best they can.

For investors, all manner of challenges will emerge, from political tension to unexpected changes in economic variables. Keeping focused on the long-term plan helps in these situations, while also being willing to make incremental changes where necessary along the way.

Have a good mix of youth and experience

The All Blacks have a wealth of experience at the moment, and this collective wisdom undoubtedly played a role in winning the World Cup. However, there were also some fresh faces that will be there for years to come.

Share investors need to ensure they have an equally good balance of reliable, lower-risk yield stocks, as well as younger companies that will likely be more volatile, but will also offer more growth.

Have a strong bench

Another area the All Blacks usually have the mettle over the opposition is with the strength of their bench players.

A portfolio of shares isn't going to remain the same over a five-year period. Some of those companies will give you reasons to sell them, either due to changes in the industry or because they simply won't perform as you expected them to.

Having a few bench investment ideas up your sleeve makes it easier to make the decision to sell, and forces you to always consider whether you're fielding the best team.

Back strong leaders

Leadership cannot be underestimated on the sports field, or in business. The All Blacks have had the luxury of a great coach and support team, as well as leaders like McCaw, Carter and other senior players.

Successful companies will have strong governance in the form of good directors, as well as on-field leaders like a quality CEO and management team. I'd sooner invest in a company with great management in a difficult sector, than one with seemingly obvious growth opportunities but poor management or governance.

Form is temporary, class is permanent

Dan Carter has had the last laugh, after some of the comments from doubters earlier in the year. Like avid sports fans, markets are fickle and investor sentiment can change on a dime.

When it comes to shares, quality companies tend to perform the best over the long-term, despite falling in and out of favour along the way. Investors can get preoccupied with short-term market fluctuations, especially given the ease of getting information these days.

However, as long as quality companies retain their class and long-term fundamentals, investors shouldn't necessarily become too worried about their short-term share price form.

Mark Lister is Head of Private Wealth Research at Craigs Investment Partners. His disclosure statement is available free under his profile on www.craigsip.com. This column is general in nature and should not be regarded as specific investment advice.