Slideshows | June 14, 2018

What we’ve learned from big tournaments – like the football World Cup

Russia sets the scene for sporting losses and wins with lessons for personal finance.

On 14 June 2018 the FIFA World Cup rolls round again – who do you support, and why? The way we think as fans about the economics of football or “Cup-o-nomics” can have a pay-off for your money too.

Big sports matches can affect financial markets, as investors get swept up in the atmosphere and may become convinced of their predictive power.

People sometimes behave as if they know who will win – even when they should know better. And share markets often fall after a big football loss.  

Views that skew
As economist and writer Chris Dillow has explained, there are many hints and lessons for investors in football coaches’ strategy and on whether being active – or passive – typically turns out best. 

There are seven more personal finance lessons from football in this slideshow.

You can also read the ING International Surveys on the cup-o-nomics of past Euros and World Cups and how people think and feel about football herehere and here

Even if you don’t benefit financially from football, big sports tournaments can have a positive effect on society – such as increased happiness .

Want more? Here are a few classic thinking traps to watch out for as teams vie for success in big tournaments.

 

1

Home bias
Most of us love to support our home team – which can blind us to the odds. 

2

Belief in control
Players can appear as if they’re controlling what happens in a game. 

3

Pass it on
Do you have a “hot hand”, or can your investing luck end at any time? 

4

Safety in numbers?
One in five in our poll say they follow friends’ choices – but this can be risky. 

5

In animal spirits
It’s easy to be swept up in a wave of emotion in financial matters too. 

6

Peer effects
This partly explains why some teams have often done so well. 

InvestingBiasSport

eZonomics team
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