The Formula 1 mindset that can help investors go further

TO MY mind, investing is just as fiercely competitive as Formula 1, where teams invest a huge amount of money – capped at US$215 million this season – to develop competitive cars.

Track conditions matter, making some cars more competitive on one weekend than on another. This creates opportunities for different drivers to win races throughout the season. But in the end, there can only be one champion.

The investment landscape operates in much the same way. Countless asset managers and hedge funds invest vast sums of money in an attempt to deliver outsized returns. But, as with F1, few manage to consistently outperform the market over the long run.