Apr 3, 2023
By: Anagh PalThe next 2 months many of us will be celebrating India’s biggest cricket festival- the Indian Premier League (IPL). And no wonder, because it brings with it a lot of adrenaline rush, nail biting moments and glamor. Interestingly, there are some investment lessons one can learn from this cricketing T20 spectacle.
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Teams check the ground conditions before devising a strategy. Similarly before you start investing, it is important to analyze your financial situation and the market conditions.
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The first 6 overs in the match during the powerplay, when only two players can be placed outside the 30 yard circle is the time when the batting team can score a lot of runs. Similarly, starting to invest early when you have fewer responsibilities is the key to creating wealth in the long run.
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In IPL, batsmen need to take a risk to build a big score. They need to hit through the air which increases their chances of getting out. Similarly, you need to take calculated risks and invest in equity so that your portfolio can beat inflation and create wealth.
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Players who contribute majorly to the team’s success are those who make small but significant contributions in almost every match. Similarly you need to be consistent with your investment to build wealth.
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IPL comes with a lot of glamor- fame, money, celebrity endorsements and everything else. But just like the best players are not distracted by all of that, wise investors should not be distracted by advice or tips on social media when investing.
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Both the batting and the bowling teams get one strategic timeout of 3 minutes. Here the captain can take feedback from the players and tweak the strategy if required. Similarly, when it comes to your investments, it important to take some time off to rethink and reevaluate.
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It has been seen that players who have played really well in one season and fetched a very high price in the next, fail to perform according to expectations. Similarly in investing , past performance is never a guarantee for future returns (mutual funds are a good case in point).
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Just good batsmen or bowlers cannot make a team win. A good team needs the right combination of batsmen, bowlers and all rounders to be successful. Similarly your portfolio needs to be adequately diversified for it to perform well over a long period of time.
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Ricky Ponting, Stephen Fleming and Tom Moody are among the most successful IPL coaches, having taken their teams to success. Similarly, you need a good financial advisor to guide you on your investments.
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The IPL goes on for about two months and a team needs to constantly review their performance to see what is working for them and what is not. Similarly you need to review your investments regularly based on market conditions and your personal milestones.
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