If we had to name one thing that's on everyone's mind right now, it would definitely be IPL! Correct, no?
Well, the Indian Premier League has always been the talk of the town for years. Be it the IPL auction, the intriguing ups and downs of the IPL point table, or the widespread controversies, there's hardly anyone who doesn't discuss this game's affair!
Taking context from the same, we thought, why not infer some investment lessons from the game of Cricket! Because just like a cricketer plans his gaming strategy, an investor, too, carves and strategizes his investment portfolio.
So, here we have jotted down a bunch of around 10 investment lessons you could learn from Cricket and world-class players. Let's dig in!
Here are the top lessons you can learn from Cricket-
When we say, 'There's no one like Captain Cool', just one name pops up in your mind, right?
Yes, you guessed it correctly, it's MS Dhoni!
Just like MS Dhoni maintains his calm on the pitch, an investor should keep his nerves patient while investing.
Taking haywire decisions while investing can result in undesirable results. It can directly hamper portfolio performance. Hence, be patient while investing, analyse the market conditions properly and then make a move.
The first thing a cricket player does before a match is check the pitch. Then, he analyses and estimates the possible outcomes based on the pitch conditions.
Similarly, an investor must thoroughly review the current and prospective market conditions before investing in a specific company's stock.
You might have noticed that Virat Kohli has always played for just one IPL team, that is, the Royal Challengers Bangalore (RCB).
The reason? Well, his consistency.
The RCB franchise has retained him throughout the years because of his consistent performance.
Along similar lines, as an investor, you shouldn’t easily give up on those investments that have given low or mediocre returns. Instead, you can consider retaining them, provide them with some time to flourish, and you will get something positive in return certainly.
IPL is all about giving chances to emerging young players who ultimately get the opportunity to represent their national teams.
Be it Shubman Gill, Suryakumar Yadav, Venkatesh Iyer, Ishan Kishan, Deepak Chahar, and Rinku Singh, many players have emerged as star players of their respective IPL teams.
Similarly, while investing, you can consider investing in emerging industries that have the potential to bloom in the coming years.
Just as a cricket team is a balanced amalgamation of batsmen, pacers and spinners, an investment portfolio should also be well-balanced.
The right set of diversified investments has the potential to generate substantial returns. Therefore, it is vital to diversify your assets based on market conditions and investment diet.
You might have heard the saying, ‘Form Is Temporary, Class Is Permanent’. This fits aptly here.
A Cricket team is finalized based on a player's current and past form and performance. However, they do not completely rely on past performance.
Likewise, an investor shouldn't make his investment decisions based entirely on the past performance of a company’s stock. Instead, he should ensure to do a company valuation, check the prospects and their risk appetite and then decide whether he should invest in that stock.
In an inning of IPL, you might have noticed teams availing of the IPL Strategic Time Out. Though in cricket, they get just two and a half minutes to plan their next move, in the world of investing, there’s no bar.
Hence, an investor should often take some time out to review their portfolio and make the necessary additions and subtractions. By regular review, one can manage the risk well, re-balance their portfolio, and avoid undesirable losses.
A cricket match is pretty incomplete without crowd cheers and applause.
Sometimes, it gets too brash and rowdy, which distracts players. To avoid the same, different players apply their different strategies to let the noise not bother their game.
Similarly, an investor should avoid market noise and focus on their plans. Getting diverted can hinder their choices leading to wrong picks and low returns. However, he should have a keen eye on the market trends that might work in his favour.
A cricket match is often bothered by rain, humidity, unleveled pitch and many other factors. Therefore, a captain always considers these factors while planning the game strategy and opting for his choice after winning the toss.
Along similar lines, an investing lesson from here is that you should consider multiple factors likely to affect the stock market and your investments. Reviewing such factors in advance can be a fruitful decision to recede losses.
If we had to name some of the best cricket coaches, Gary Kirsten, Andy Flower, Duncan Fletcher, and John Wright would certainly top the list.
With the right guidance, these coaches have made their teams win numerous trophies and accolades.
An investor, too, can take help from a qualified professional who understands the knows and hows of the stock market and investment domain.
Such financial professionals can guide you while investing, help you assess your risk, support you in correcting mistakes and assist in choosing the suitable investment that fits your bill.
If we sit and count, we can find tons of similarities between Cricket and investment planning.
There are many more lessons to learn from Cricket that you can easily apply while making investment decisions; the above ones are just the starters to get you onboarded.
The next time you plan to invest somewhere, consider thinking like a Cricketer. Simply check the market pitch, review the ground factors, choose the right cluster of diversified market players, and plan your move.
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Disclaimer: This blog is solely for educational purposes.