It’s evident that India bleeds blue. Cricket in India is not just a sport, it’s a religion driven by expectations and emotions. In a country where wins are celebrated with elaborate processions and even the slightest of performance issues are bashed publicly, cricket has a lot to teach us. The stakes are high; may that be a World Cup match or your capital.
The stock market, surprisingly, is also subject to similar emotions where profits are celebrated, and any loss can lead to chaos. But should traders and investors lose their cool? Definitely not. In fact, they should learn the art of managing emotions, environmental stimuli, and handling stress from cricketers who have to deal with such things frequently.
Let us find out the investment decisions we ought to learn the World Cup way.
Lesson#1: Team Work Makes The Dream Work
No winning side has just great batsmen, marvellous bowlers or magnificent fielders. There must be a perfect combination of all three. The key is to have skills that are complimentary to that of other players and work in unison.
The same way, if you want to win at the game called investment, you must allocate your resources judiciously and thoughtfully between the different types of investment instruments available to you. A proper mix of equity, debt and money market, as well as more traditional sources like gold and bank deposits are a good start.
All these instruments have their own qualities which make them desirable in a portfolio. When we talk about inflation, we can say that equity component of our portfolio can help us manage it. In the same way, when we fear market volatility, debt component as well as gold and other traditional instruments that make up our traditional component save the day.
Let’s say, now you have a great team. What now?
Lesson#2: Know Your Ground
Every pitch is alike when we talk about dimensions. All standardized pitches are 20.12-meter-long and 3.05-meter-wide. However, the soil composition, the water content, the weather at the venue as well as minute details like the types of grass and the number of times it has been rolled, all influence the game play. There are innumerable types of pitches. Every pitch can be said to have its own personality. Some are fast and bouncy, and some are slow and low so on and so forth.
Markets are far and wide. An investor must also know about the general trends in the market. If there is an uptrend, don’t expect the prices to drop several points. Similarly, if there is a widespread downtrend, expecting prices to rise unparalleled, is not going to work. Understanding of the general market sentiment is very important. An investor must carry out a sector wide and industry wide analysis before investing.
Lesson#3: Behind Every Great Team There Is An Even Greater Coach
Behind every successful team is a dedicated coach. Coaches have the vision to align the skills of all the team members and make it one great team effort. Players play well but the strategy and direction find their roots in the minds of the coaches. How to play according to the team’s advantage is something all great coaches have in common. From Mike Hesson, who has been the longest serving coach to the Black Caps to Darren Lehmann who coaches the Australian team, playing to the team’s advantage is key.
In the same way, a Certified Investment Advisor is your investment coach. Investment decisions are serious,and one should always seek advice before taking a decision which could have unforeseen outcomes. Make sure you take time out to select the right investment advisor for you. An Investment Advisor will help you assess your risk appetite and suggest investments which are aligned with your financial goals and investment style.
The ICC Cricket World Cup is under way and as much as we enjoy watching it and cheering for our team, we should pick up these learning and apply them to our finances. Just like having an early start is beneficial in cricket, it is quite helpful in investments too. Trust yourself and begin your journey to a financially sound tomorrow.Invest responsibly!