Lessons from Cricket for your Investments

Oh Yes! World Cup 2019 is finally here. We all have our favourite players, and we cheer for them. But when it comes to the World Cup, nothing can beat the patriotism towards one’s home country. It’s going to be 1.5 months of non-stop cricket fever. Did you know your game can get more fun when you can use the rules and features as analogies to learn parallel lessons in personal finance? Cheer for your team and at the same time cheer for your investments. Here are some lessons for you from your most favourite game that you can implement to build wealth.

Do not enter the field without a protective gear

Impact: Without adequate precautions on the field players are vulnerable to injuries. Similarly, if your financial planning lacks the element of protection, your investments are exposed to several risks.

Tip: Before starting your investment journey, priority should be to secure yourself against life and health. Life Insurance, Health Cover and Emergency fund are a must. These will help you safeguard your and your family’s future.

Try to stay on the field for long 

Impact: World’s best batsmen have been out on a duck. Giving up under pressure or adrenaline rush has often resulted in unexpected changes to the game. This is similar to an investor who gets panicked looking at daily market movements and ends up suffering losses by selling their investments in a downturn.

Tip: The best is achieved only with determination and patience. Make sure you are invested for the long term and are not affected by short-term market volatility.

One good player can not do all the work

Impact: There might be instances where one good player has single-handedly taken the team to victory. However, banking on a single player isn’t the right strategy and will not work in the long term. As an investor, do not be satisfied with one investment or one sector. Every investment has its cycle of ups and downs.

Tip: Do not concentrate on just one investment, in the long term it doesn’t work. Diversification is the key. Diversify both in terms of a number of funds and sectors. Spread your bets to mitigate risk.

Keep a check on the run rate

Impact: Waiting for the slog overs to do major scoring is a bad strategy. Its good to start early be it scoring runs in the first few overs or investing.

Tip: Delayed investing means, you either compromise on your goal or end up shelling out more in the present. Starting early can help you achieve long term goals such as children’s education, wedding and your retirement.

Steadily build your Innings

Impact: Avoid having too many dot balls. Running between the wickets and occasional boundaries will help to get a decent score even on a batsman unfriendly pitch. Similarly, with your investment as well, don’t always target for high investments, aim to build wealth over a period of time.

Tip: Don’t be under the impression that investing is only when you have large amounts available. Small and regular investments will help you achieve your goals. SIPs are the best option available. Be smart and achieve your financial goals easily.

Don’t be overly defensive

Impact: Just running between the wickets and not taking the risk of hitting boundaries wouldn’t help it getting a good score for the team. Likewise, investing only in low risk funds wouldn’t completely help you in achieving your goals.

Tip: Little risk is healthy. Investing in equities for long durations and through SIPs will help you earn more returns. Long term investments and equities are best friends.

Don’t have an imbalanced team

Impact: A bad team composition can hurt the entire game, similarly, poor asset allocation will have an impact on your portfolio returns.

Tip: Extremes are bad. Overexposure to equity is very risky at the same time only having debt investments will give low portfolio returns. Factors like age, risk tolerance and goal horizon will help you decide on the right asset allocation.

Communicate well 

Impact: Miss communication or poor calls between the batsmen lead to run outs. Not keeping your family up to date on your investments, insurance and liabilities can have similar unpleasant consequences.

Tip: Always inform your investment decisions to your spouse or family members. There is no harm in taking their opinion and planning your financial goals collectively. In fact, this will help you get more clarity on your goals and helps in making the right investment choices to achieve them.

Therefore, don’t just enjoy the game, take back the learnings and implement them to your financial planning. Talk to the best advisors at Upwardly for investment guidance.

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