How Building Your AFL Dream Team Is Like Building an Investment Portfolio

AFL planWhen it comes to creating your dream team, you are provided a limited amount of money to spend on a number of players, with the goal of spending that money wisely to create the best team possible.

It’s important to remember that when you are creating a team, you need to be able to fill all roles for all positions on that team.

That’s where building an AFL dream team can be just like a building a good investment portfolio. You really want to make sure that you have all areas of the market covered, and you have solid diversification across your entire investment portfolio.

Let’s Focus On Building Your Own Investment Forward Line.

When we're talking about a forward line, in terms of an investment portfolio, we are referring to the growth assets. These are the areas that are going to be largely geared towards shares or property assets. Growth assets are historically going to provide a stronger return over the long term, but are also going to be a more volatile set of assets classes as well.

When we're talking about an AFL team, in the forward line we have the Full Forward, the Forward Pocket, and our Center Half Forward.

Full Forward

man with pie chartI would compare our Full Forward to the Australian Small Caps part of your investment portfolio (These are all those companies that sit outside of the largest 100 on the ASX by market cap). This is a part of the portfolio that is typically going to perform very well in periods, but may also have flat periods or down periods throughout the investment cycle. An example of this maybe a Jack Riewoldt. He can come out and kick a bag, but he can also have games where he's not performing at his best and goes missing.

Forward Pockets

I’ve compared our forward pocket position to Emerging Markets, these are second world country economies that are up and coming; places like Brazil, or other places in the South Americas and also parts of Asia. In terms of AFL, I think Eddie Betts fits this analogy perfectly. He's a guy that can turn the game on its head whenever he wants and can win a game off his own boot, but then again he can also have games where he's maybe not performing at the same level consistently and will have form slumps.

Center Half Forward

pie chart on paperI've compared the centre half forward position to our International Equities component, and when I'm talking about international equities I'm talking about the S&P 500, the top European markets and Asian markets as well, blue chip companies. Companies like Google or Apple, Samsung, as well; companies that are really large on a worldwide scale and are going to be performing on a much more consistent level than perhaps our other two areas of the investment portfolio previously mentioned.

An example of this might be Josh Kennedy. He's won the Coleman medal two years in a row, and last year he was runner up. A player on your dream team you’ve got to pay a high premium for, but you expect a consistent result week in week out, as you would in your investment portfolio.

Clearly, when it comes to creating an entire team you need good solid diversification across the board, with a mix of consistent players and match winners, just like in a good investment portfolio. Today we've only talked about the forward component, in terms of making up an entire AFL team. Obviously you still need to consider your midfield and your defensive positions so stay tuned to find out more.

About The Author: Alex Luck

As a Financial Adviser at Financial Framework, Alex' Objective is to derive strategies which lead to wealth creation, successful retirement planning and asset protection by making smart, well informed financial decisions for his clients.