Unless you have been living under a rock or on a deserted island, there is a strong chance that you have seen the mysterious grid of grey, green and yellow square-shaped tiles popping up on your social media feeds, accompanied by creative expressions of triumphant jubilation, sighs of relief or plain frustration.
Welcome to the world of Wordle: the online word game that has taken the world by storm.
For the uninitiated, the humble browser-based word game involves guessing a new five-letter word every day in six attempts. Each attempt, which must contain a valid word, leads to a revelation as to which letters of your word are correct and in the right place (colour-coded in green), correct but in the wrong place (colour-coded in yellow) or do not appear in the word at all (colour-coded in grey).
Once you have solved the day’s puzzle, you are prompted to share your colour-coded grid (without the letters to avoid spoilers) on various social media platforms — a daily ritual for many users worldwide.
So, what has all this got to do with money and personal finance, you ask? Turns out, what appears as a no-frills five-minute online indulgence does contain some interesting investment parallels hidden under the surface. Peel off the layers of this guessing game (Hangman 2.0, anyone?) and you may find some valuable investment lessons lurking in the details.
Let’s dive right in:
Increase your serendipity surface area
Wordle abounds in randomness and noise, both elements equally prevalent in investing. To counter their effects, you must be directionally correct and diversify to optimise resources, lower risks and drive better outcomes.
For example, in Wordle you could either use “Adieu” or “Moron” on your first attempt, but anyone who’s played the game knows “Adieu” offers far better odds of serendipitous discovery by optimising resources to improve outcome.
To draw a parallel between Wordle and investing, one can optimise a portfolio and drive better investment performance by being careful in your selection and well diversified.
This speaks perfectly of having proper portfolio diversification, says Markus Muhs, senior investment adviser and portfolio manager with Muhs Wealth Partners at Canaccord Genuity Wealth Management.
“Owning a bunch of stocks in just a few sectors, or several similar funds, is no more diversifying than using a word like ‘Moron’ as your first line Wordle guess,” he says. “Where the randomness of the outcome is at the max, you want as many different stabs at random letters as possible.”
Not being aware of the fees, fund holdings or overexposure to a certain sector or geography constitutes being directionally incorrect and crimps your optimisation odds, he says.
Playing blind with moonshot investments
At the start of Wordle solving, some words may be directionally correct, such as “Beams”, but they are not necessarily a great first guess. Why? Because B is relatively rare, a better choice may be “Teams” or “Reams”.
When you look at letter frequencies in the English language, B appears in less than 2 per cent of words while frequencies for R (6 per cent) and T (9 per cent) are significantly greater.
And yet, sometimes it is OK to take a chance with “Beams”. In investing, the letter B could be a risky bet like cryptocurrencies, a meme stock or a highly volatile name such as Tesla.
No doubt, the B could be a suboptimal investment choice, but it may pay rich dividends every now and then and help players to crack the Wordle puzzle in fewer tries.
Sometimes you are on line five on Wordle and have to make some risky guesses at finding the right word. It is a common dilemma: repeat letters from prior lines to guess their places or use words with entirely new letters.
“When you are late in the game of investing — if you have determined you are behind in your retirement saving — you might feel compelled to go for that high-flyer investment,” Mr Muhs says.
While most financial advisers will not recommend it, it may be a suitable option for willing clients with certain risk tolerance. It may end up paying big at best or the investor could incur some (bearable) losses at worst.
“Sadly, though, this is how a lot of investors end up losing everything in scams or otherwise overly risky schemes,” he cautions.
Unpredictability is deeply ingrained in the game
The correct word for Wordle #208 was “Abbey”. The word flummoxed a lot of smart people who employ “strategies” with a high probability of success.
As a word with two Bs, “Abbey” did not work well with those strategies. Every now and again, we are reminded of the capriciousness of life. Investing, as is the case with life, has a lot of randomness involved.
For that reason, your outcome is not a singular reflection of your talents or your optimised guesses. We have to make the best decisions we can with the information available at the time.
In investing, as in Wordle, guesses are often made better when they are informed by quality data. Studying relevant insights — the yellow, green and grey tiles — might help in deciding whether or not the next move has improved the odds of success.
Similarly, the trick to better investing outcomes is making use of available information, not focusing on the inherent randomness that may be instrumental in various outcomes, positive or negative, in the short term.
Create and automate
When it comes to investing, making fewer trading decisions works better than frequent. For the average equity investor, the less day-to-day involvement in the investing process, the better.
Investors may be better off buying a globally diversified, low-cost exchange-traded fund and then stepping aside. The logic is simple: create a system that does not need you to micromanage the process.
Josh Wardle, a former Reddit software engineer and the New York-based inventor of Wordle, did that, according to an article in the The New York Times, which this week acquired the word game.
He created a list of 2,500 commonly known five-letter words, approved by his partner Palak Shah, and created software that automated the process of putting out a new word every day for the next few years.
Economist Benjamin Graham once famously said: “The investor's chief problem — and even his worst enemy — is likely to be himself.”
It is difficult for the average investor to pick stocks or time the market. Therefore, it is best to design a system that allows you, the investor, to move out of the way.
“Automation, by way of keeping out of the day-to-day management of your investments, and setting up automatic savings plans can be the most powerful wealth builders over time,” Mr Muhs says.
“I don’t know a single soul in my 15 years in the industry who did anything but build wealth by having a monthly contribution plan set up to go into a highly diversified equity portfolio, while ignoring the markets.”
Don’t believe everything you see
Every now and again, you come across a Wordle score where the player “guessed” the right word at the first attempt, articulated by an immaculate row of five glistening green squares.
While the player would like you to believe they are a “genius” — a title Wordle reserves for this rare accomplishment — it is highly likely that they are being dishonest.
In reality, it is almost certain that they solved the puzzle after several attempts on one device and plugged the right answer in the browser on a different device, making it appear as though they cracked the puzzle on the first attempt.
In the world of investing, a similar strategy can be employed by financial advisers whose pay-cheque comes from the company whose funds they recommend.
The fund company may have many underperforming or unsuitable products, but the adviser will probably downplay that fact and only play up the product that performed well. Interestingly, that specific fund would also be best suited for their client’s “individual” investment goals.
“It is easy for any adviser to show the merits of a back-tested strategy, and too often investors fall for it,” says Mr Muhs. “Put the track record of a technology-heavy, US-overweight portfolio next to a more internationally and sector diversified portfolio over the past 10 years and, of course, the former beats the latter.”
That is how things played out in the market during that period. However, “the same comparison over the prior 10 years shows a very different story”, argues Mr Muhs. He says that the strategy “is about as irrelevant as someone’s fake Wordle score”.
The investment industry is known to spin success stories about their products with misleading presentation of returns designed to create a favourable impression.
So, should we trust people who post genius-level 1/6 Wordle scores? “It is possible, but just as improbable as someone having bought AMC [stock] before its price shot up,” contends Mr Muhs.
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UAE currency: the story behind the money in your pockets
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
MATCH INFO
Kolkata Knight Riders 245/6 (20 ovs)
Kings XI Punjab 214/8 (20 ovs)
Kolkata won by 31 runs
Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The Word for Woman is Wilderness
Abi Andrews, Serpent’s Tail
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
The biog:
From: Wimbledon, London, UK
Education: Medical doctor
Hobbies: Travelling, meeting new people and cultures
Favourite animals: All of them
RESULTS
6.30pm: Maiden Dh165,000 (Dirt) 1,200
Winner: Miqyaas, Adrie de Vries (jockey), Rashed Bouresly (trainer).
7.05pm: Handicap Dh165,000 (D) 1,600m
Winner: Untold Secret, Xavier Ziani, Salem bin Ghadayer.
7.40pm: Maiden Dh165,000 (D) 1,600m
Winner: Shanty Star, Fabrice Veron, Rashed Bouresly.
8.15pm: Handicap Dh190,000 (D) 1,600m
Winner: Alkaamel, Antonio Fresu, Musabah Al Muhairi.
8.50pm: Handicap Dh175,000 (D) 1,400m
Winner: Speedy Move, Richard Mullen, Satish Seemar.
9.25pm: Handicap Dh175,000 (D) 2,000m
Winner: Quartier Francois, Fernando Jara, Ali Rashid Al Raihe.
BEACH SOCCER WORLD CUP
Group A
Paraguay
Japan
Switzerland
USA
Group B
Uruguay
Mexico
Italy
Tahiti
Group C
Belarus
UAE
Senegal
Russia
Group D
Brazil
Oman
Portugal
Nigeria
Poacher
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Read more about the coronavirus
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
The years Ramadan fell in May
Abandon
Sangeeta Bandyopadhyay
Translated by Arunava Sinha
Tilted Axis Press
Killing of Qassem Suleimani
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Mumbai Indians 213/6 (20 ov)
Royal Challengers Bangalore 167/8 (20 ov)
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
The five pillars of Islam
Mohammed bin Zayed Majlis
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
THE%20SWIMMERS
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MATCH INFO
English Premiership semi-finals
Saracens 57
Wasps 33
Exeter Chiefs 36
Newcastle Falcons 5
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Killing of Qassem Suleimani
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The five pillars of Islam
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
More from Neighbourhood Watch:
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
More on Quran memorisation:
Killing of Qassem Suleimani
The biog
Born: near Sialkot, Pakistan, 1981
Profession: Driver
Family: wife, son (11), daughter (8)
Favourite drink: chai karak
Favourite place in Dubai: The neighbourhood of Khawaneej. “When I see the old houses over there, near the date palms, I can be reminded of my old times. If I don’t go down I cannot recall my old times.”
Killing of Qassem Suleimani
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The years Ramadan fell in May
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
Mohammed bin Zayed Majlis
More on animal trafficking
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Who is Allegra Stratton?
- Previously worked at The Guardian, BBC’s Newsnight programme and ITV News
- Took up a public relations role for Chancellor Rishi Sunak in April 2020
- In October 2020 she was hired to lead No 10’s planned daily televised press briefings
- The idea was later scrapped and she was appointed spokeswoman for Cop26
- Ms Stratton, 41, is married to James Forsyth, the political editor of The Spectator
- She has strong connections to the Conservative establishment
- Mr Sunak served as best man at her 2011 wedding to Mr Forsyth
How has net migration to UK changed?
The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.
It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.
The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.
The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.
