Educate Yourself


Investing Lessons to learn from Cricket

India is a cricket loving nation and people across age groups follow it like a religion. Whether it’s a test series or a premier league or a world cup, the fans have a point of view on everything. The Indian team has been playing exceptionally well in recent times, being victorious in most of the matches they have played. However, the game of cricket requires planning, strategy, intelligence and discipline, and so does investing. Let’s dwell on some lessons that can be learnt through cricket.

    1. Each investor is unique

      There are 11 players that make up a cricket team comprising of different specialisations. Thus, each of the 11 are unique and collectively all of them help build a good team and strategize for a game. In exactly the same way each investor is unique and has his/her own life style, income & expenditure, capabilities to take risks, has different financial goals – long term and short term etc. All these elements put together define the investment strategy the investor will need to adopt.

    2. Teamwork does it all

      A balanced team will comprise of batsmen, bowlers, all-rounders. Each of them have a specific role to play. While batting, the batsmen will ensure the team gets a good start by building a good score. Similarly, while fielding the bowlers and fielders will strive to restrict opponents from building a big score. Same is the case with investing where over exposure to one asset class could prove detrimental. Equities help in wealth creation as they beat inflation over a long-term, while debt reduces volatility and brings stability to a portfolio. Cash always comes handy to meet emergencies or any short term need and commodities like gold help provide diversification. Thus, a portfolio comprising of a mix of all asset classes – equity, debt, cash, gold will help investors diversify and achieve their goals. This will also ensure they are not exposed to high risk.

    3. Practice makes perfect

      Physical fitness, training, proper diet are some of the pre-requisites for players in a cricket team. All this requires commitment and focus on the long term objective of being fit for every match and also for being part of the team for many years. Investors too need to be disciplined with investments. Investing calls for a lot of commitment and consistency in continuing investments. The focus should be on staying invested for the long term and not bother about short term distraction and gratifications.

    4. Check progress

      In cricket, it is very unlikely that the same 11 players play all matches. Every match is different and depending on the strategy the final team is decided. Investments too need to be evaluated regularly for their performance and if need be re-balanced due to changes in investors risk profile or goals.

    5. Coach

      A coach plays the role of a guide constantly working with the team on their fitness, strategies and game plan. Similarly, a financial advisor can help investors channelize their investments in the right mix of products based on their goals and risk taking ability.

      Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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