Staying on Top is the Hardest Part: Investing Lessons from Italian Soccer

by Corbin Grillo

While I’ve never been much of a soccer fan, I do catch World Cup fever every four years. It’s such a unique sporting event that it reliably renews my appreciation for the beautiful game. My dad’s side of the family is from Italy, so I’ve always pulled for Azzurri, Italy’s national team. And with the 2026 tournament right around the corner, I’d ask a small favor: that we all take a moment of silence for the struggling squad, which once again won’t be part of the field this year. The fact that the World Cup has expanded from 32 to 48 teams only adds insult to injury.

Following their 2006 World Cup championship, a tournament in which Italy overcame a 1-0 deficit and the infamous Zinedine Zidane headbutt, to defeat France, the Azzurri have experienced only modest success. In fact, they’ve failed to even qualify for the past three World Cups. It’s a stunning fall for a nation that has hoisted the World Cup trophy four times in its history.

After spending more than a decade in the investing industry, I often can’t help but notice parallels between investing and sports. Around the same time Italian soccer was at its peak, a historic American company, General Electric (GE), had become the most valuable stock in the world. The strategies and tactics employed both on the pitch and in the boardroom appeared poised to keep each of them on top for the foreseeable future. Or at least, that was the prevailing narrative at the time.

But as investors and soccer fans alike know, the years that followed unfolded very differently from what consensus expectations predicted. GE’s market capitalization collapsed to just 15% of its former peak before the company eventually split into three separate businesses. Only now, nearly 20 years later, is it fully recovering investor losses.

And the Azzurri, as we’ve discussed, will have to wait another four long years before they have the chance to reclaim their former glory. While the reasons for the decline of GE and the Azzurri have been sufficiently covered elsewhere, I believe their similar stories illustrate two hard-won lessons in portfolio construction and risk management.

Investing Lesson One – Understanding Expectations

The first lesson is understanding what consensus expectations reveal. After all, whether at the individual company or market index level, security prices are essentially an aggregation of investor expectations regarding a stock or group of stocks. The Linscomb Wealth Investment Committee believes financial markets are relatively efficient, so simply “betting against the consensus” is not, in our opinion, a sound long-term investment strategy.

That said, there are market environments in which our Investment Committee’s perception differs from the broader consensus, prompting us to make strategic portfolio adjustments that can potentially increase future returns when consensus expectations are too pessimistic, or help protect capital when expectations become overly optimistic.

The key takeaway is that security price movements are not necessarily driven by changes in a company’s or market’s fundamentals in isolation, but by changes relative to investor expectations.

Investing Lesson Two – Past Success Is No Guarantee of Future Performance

The second lesson is the value and impact of portfolio diversification. Human nature leads us to assume that past winners, whether in sports or investing, will continue to succeed in the future. The psychological comfort of aligning with previous winners tends to influence our behavior more than we’d like to admit. And the narratives surrounding today’s winners are often compelling, making it easy to justify betting heavily on them.

But after reaching the pinnacle of success: winning the World Cup and becoming the most valuable company in the world, the preceding performances of the Azzuri and GE demonstrate how current predictions often differ drastically from what ultimately unfolds.

In our view, a robust and diversified portfolio remains the best approach for navigating an uncertain future. Concentrating heavily in today’s winners may feel rewarding in the short term, but appropriately spreading investments across asset classes is essential for long-term portfolio durability.

Conclusion

By the time the 2030 World Cup rolls around, the Azzurri will have had nearly two decades to figure things out. Will they be the next overlooked team to undergo a long-awaited turnaround, as GE eventually did? I certainly hope so, but only time will tell. Whatever the future holds for Italian soccer, it will always serve as a salient reminder to me about the importance of risk management and humility in the face of uncertainty.