Every year millions of Indians gather to celebrate a month and a half long festival known as the Indian Premier League or the IPL. But do you know that apart from all the fun, entertainment IPL can also teach us a few things about investment? Here are a few lessons that you can learn from the most enjoyed and loved game.
Mumbai Indians have lost 8 matches so far. Staying in the game is important
Mumbai Indians have lost 8 out of 8 matches so far. However, they have won IPL 5 times in the past under the leadership of Rohit Sharma. The top batting order with players like Ishan Kishan and Rohit Sharma has been completely out of form. The death-over batting expert Kieron Pollard has also disappointed.
One of the costliest bets made by Mumbai Indians for a new player is for Ishan Kishan for Rs. 15.25 crores. Ishan Kishan made initiation the IPL 2022 on a strong foot with 81 runs not out and 54 runs in the first two matches but failed to continue the same in subsequent matches.
As the IPL slogan for the 2022 season says Ye Ab Normal Hai! taking inspiration from the normalization post-Covid-19, the underperformance of a team/portfolio is a common trend during uncertain times. Indian markets underperformed during 2018-19 however they made a stellar come bask post-Covid-19 after touching their lows. Who says that this is not possible in the case of Mumbai Indians? Mumbai Indians have not focused on buying experienced players like Hardik Pandya they they have not retained instead they bought most of the young players. Mumbai Indians are looking to build a team with a longer-term perspective, perhaps three years or more. This is a sheer reflection of how big players think about short-term underperformance but long-term sustainability.
One will see underperformance in the short-run however staying in the game is important to yield great returns in the long run.
Power Play: Start Early.
In an IPL game, the initial six overs are the best time to start for a batsman although one of the most crucial times as the pitch is new and bowlers do take advantage of that. If the batsmen make most of it, the continuous flow of runs in these overs can then decide the outcome of the match since the team would be able to secure a high score.
Similarly, in investing, it is of utmost importance to start investing early. The earlier you start your SIPs the more time you can dedicate to those investments and hence like any IPL team you can make a sufficient corpus to meet your goals
A balanced team changes everything. Diversification is the key
A stable and balanced cricket team has a perfect mix of big hitters and defensive batsmen, spinners, fast bowlers as well as all-rounders. This makes sure that the entire team has a mix of everything and that they can beat every situation thrown at them.
Your portfolio to needs to be diversified across different assets. A good mix of equity, debt, and liquid investments in your portfolio is balanced enough to handle market fluctuations. While equity funds can help you generate inflation-beating returns debt funds or commodity funds can help protect the downside during volatile markets.
Discipline and patience are an indispensable virtue of the successful
The IPL of 2015 was a memorable one. Any IPL-loyalist would remember the way Mumbai Indians were beaten up in their first four matches and their name flashing at the bottom of the league table sent a shiver down the spine of every MMI fan then. What followed next was an exemplary display of enthusiasm and form while not losing the golden virtues of patience and discipline. We all know what happened next – the trophy was swinging on the waves of blue jerseys.
Though anecdotal, it has quite a lesson for everyone out there trying to manage their finances. In the short run, there can be volatility – stomach-lurching volatility; but once you manage to sit tight and focus on the game with continued patience and discipline you will realize that the knot in your stomach was nothing but the feeling you get just when the plane takes off the runway. It may be uncomfortable in the beginning but proceeding with patience and discipline will take your flight to the skies.
A cricket game can teach you so much about investing. The next time you are watching your favorite team playing think of how you can apply the tactics while investing. This lesson will not only help you grow your investments but also you can achieve your financial goals if you play the cards right.
