Incredible Lessons Taught by the IPL About Investing?
As there are several rules and regulations in IPL and the way it is played is fixed to specific terms and conditions. The same you can apply to your investment decisions and financial planning.
Whenever you are investing in some business, there are certain norms, terms, and conditions which have to be considered if you want to achieve your goals over a while. There is another way of achieving it through mutual funds investment as there are many options available to the investors.
Just like it is uncertain that who is going to be the winner in T20 cricket as the rules and trends of the game keeps on changing. Similarly, the investors would not know the certainty at the time they are investing their money. Even the patterns of the market keep on flicking, it is unpredictable whether their investment is going to be fruitful for them or not.
It is true to some extent as there is an option for investment in mutual funds for the long term which is quite safe as compared to other investment options.
Start Investing Early – T20 is akin to early investments in some ways. In IPL, more runs the team score in the beginning, lesser will be the pressure on the other batsman and better target they will score. Likewise, the early the investors invest their money, better collection of returns they will be able to get on their investment over a period of time due to time-related factors which allow you to take risks and compound interest that will make a difference.
Wait for the right opportunity – A batsman in T20 cricket, cannot hit a six on every ball and they have to keep patience to wait for the right ball to come and hit a boundary. Correspondingly, smart investors keep it simple and are patient to wait for the right opportunity to invest. Even if they have done enough research to know of an investment they have made that it is a wise buy, they need not lose patience and should be willing to wait for their return.
Be ready for unexpected – As the D/L method in T-20, investors should always be prepared to meet the unexpected outcomes. While calculating the returns when investing, you should also not forget to figure a few risk factors that might occur like deflation, loss to the company, reduces the prices of shares, etc. This would help you in being precise while calculating the profits from the investment.
Keep a perfect balance – As in an IPL, a team needs a balance of aggressive hitters, right bowlers, and productive players. Similarly, an investor's portfolio needs a perfect balance of appropriate funds. This is something that each one of us knows that a balance is critical whether it is a match or an investment. An investor should always invest in various kinds of schemes to balance out the risk, period and profits.
Also Read – Different types of mutual funds in India
Learn from bad experiences – As a bowler learns many things from a bad over, likewise investor should also learn many things from lousy investment decision and must try to recover from it as soon as possible.
There can be chances when your choice does not go as you thought. So, to avoid it, you can take a few steps such as –
- Appoint a financial advisor if you are unsure
- Always plan according to the taxes and future
- Try and invest in different places instead of risking all your money at the same place
- Always invest in a balanced way instead of thinking extreme which is either taking too much risk or being too conservative, which would end up costing you too much in long run.
Be Consistent – Consistency is must to attain maximum returns like a consistent performance is needed by every player to assure victory. Be it a match or an investment consistency is crucial as, without it, there are very fewer chances of success and good returns. The reason behind it is that consistency removes the drawback of checking at the point to point returns and getting influenced by current performers.
Seek Expert Advice – Guidance & direction is needed in a T-20 game for better performance. Similarly, the advice of a financial expert is always necessary to get maximum returns. If we compare a T-20 match with investment, they are quite similar because for best results, we always need a coach in cricket.
In the same manner, a financial advisor also plays a significant role. An advisor not only tells you what to do in critical situations but also advice about what not to do which is indispensable to know.
Score always matters – Investor shouldn't lose hope if he fails to earn a profit. Changes in investment strategies with your financial planner will make you a big player in the field of investment. As every single run is essential in the match, same is with your money which you invest. It is not always possible to win every game, same is the case with investments, there can be times you may have to bear slight losses, but you should not get disheartened and can take help of a financial planner so that he can advise you the best place to invest in which the risks are less and is in accordance with your requirements.
Play like a winner and beat the inflation – Just as a player do in an IPL match, you should also be extra cautious while investing your money. The primary thing to win an investing match is never let your funds die in a savings account. Always go ahead and invest your money where there is less risk and more returns. You should always make sure that your money grows faster, like runs in the match and be a winner.
These days many investors and even financial planners have started shifting their attention to mutual fund investment in India as they consider it a safe and better return-on-investment option.
Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.