Aditya Birla Sun Life AMC Limited

Cricket and Investing: The long-haul Sports

Jun 25, 2019
5 mins | Views 7688

Things couldn’t have been better for Indian cricket lovers in 2019. IPL has just wrapped up, and after the starters, fans are eagerly waiting for the grand main course: Cricket World Cup 2019.

With the biggest cricket tournament in the world set to start at the home of cricket shortly, the cricket fever has engulfed India. Homes, offices, public transport or social networks, the buzz about cricket has started droning out any other topics of discussion. After a gap of four years, the billon plus cricket experts are in action. Emotions run high, the atmosphere is charged, and we are all evaluating the strengths, weaknesses and success chances of our favourite teams. However, scratch a little below the surface, and you will discover that cricket has a lot in common with investing, much more than you imagined. Bring out your cricket expertise and find below how the traits that make a successful cricket team can also help you in creating a successful investment choice.

Wicket: That’s all everybody cares about. It is the wicket that matters. The bowlers want to take the wicket while the batsman must be mindful of the fielders around and ensure that the ball doesn’t hit the wicket. He needs to apply all his skill, endurance and mental sharpness to keep his wicket safe. Similarly, as an investor, you must keep uncertainties, doubts, and fears away. Keep batting patiently and the success will come to you in the form of financial freedom.

Captain: Success in cricket depends majorly on the captain. The winning team has a great captain who understands all the rules and tricks of the game, makes the right choices and guides players to success. Similarly, a good financial planner/advisor is the expert of the investment game and can create the strategy that can make you win your financial freedom.

Playing style: A batsman must decide his playing style based on factors such as timing of his shots and the playing conditions like pitch, outfield, weather and opposition bowlers. Accordingly, the batsman decides whether to go smash a burst of boundaries and sixes or to anchor down for a long innings. In the same way, investments can be made in debt funds if you have short-term objectives or you may opt for equity funds that are aggressive and have the potential to provide returns over the long term. According to your preference and objectives, you can choose the option that suits you best.

Team structure: Should we play 6 batsmen or seven? Would it be a good idea to play an extra spinner or a fast bowler? What should be the batting order? These are the questions that inevitably come to mind whenever the team for any cricket match is discussed. Team structure is decided depending on the crucial elements like team’s playing style and the pitch, climate conditions. Similarly, to minimise volatility and maximise returns, we need to determine and stick to our asset allocation strategy while building our investment portfolio. Simply put, it means dividing your investments into various asset classes (Equity, Debt, Gold etc.) based on your risk-taking capacity, goals and the time frame needed to reach those goals. Determining the right asset allocation strategy can help you achieve your financial goals.

The Rivals: Participating at the World Cup level means that no opposition team can be taken lightly. Even an underdog can win the match, cricket is a game of uncertainties. In the same way, investing makes us deal with oversight, tax, greed, lack of patience, over-spending etc. All these join hands to form the team that stands in the way of our financial goals. To know them in-depth and create a strategy to take them on is vital for realising our financial goals.

The World Cup Trophy: It doesn’t get bigger than this. The team that performs the best always wins. Every world cup sees the emergence of new stars. While the success might appear to have come overnight during the tournament, it is often, the result of several years of hard work with the aim of winning the trophy. In the same way, it is imperative that one displays patience and perseverance while investing. A long-term perspective has the potential of making you the poster boy of financial freedom.

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

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