The seasons IPL is promising exciting as ever. If you are one of the ardent fans of IPL, there could be several financial planning lessons that you can draw from the way the shortest version of cricket is played. T20 cricket has several rules and regulation and the way it is played, which you can also apply to your investments to achieve your goals over a period of time.
For example, Powerplay is a period where fielding restrictions are applied in first six overs with only two players allowed outside the 30-yard circle. The strategy is applied in order to make more runs in the initial over. A parallel on the financial front would be that as soon as you get your monthly salary, set aside 10-20% of it in savings on monthly basis. In the same manner, try and make a habit of saving first by restricting your expenses in the initial days. These savings will help you generate a huge corpus over a period of time. Hence, one must apply powerplay to their savings and create good wealth in future.
Here are 10 investment planning tips which you can take from this IPL 2018.
<> Aim to score high
In T20 if the momentum of run scoring is kept intact from the beginning till end it helps the team to score big. Similarly, when it comes to investing, you should start your investments as early as possible because doing so will help you multiply your wealth. And by the time you retire, you will able to create a huge corpus due to the power of compounding.
<> Do a proper ground-check before investing
It important for a captain and his team to observe the fields and pitch before going for a toss because it helps them understand the suitable conditions of ground and what their strategy should be. Similarly, before investing, investors should analyse the market scenario because market trends help to decide the right buying and selling options of stocks and funds at any given point in time.
<> Diversify your investments
Building high score requires team effort. Things which we should take from this cricketing strategy is that while savings and investing money towards a certain financial product, it’s always recommended to diversify it across the various categories of funds like (large-cap, mid-cap, infrastructure funds, etc.).
<> Keep focus intact
While facing odds, team fights till the end. Similarly, despite facing the market volatility, correction and fluctuation in between the journey of your ongoing investment, you should keep yourself focused on achieving your desired financial goal.
<> Make use of the strategic break
Every match has a strategic time break where the team discusses the next level strategy for the remaining overs. Similarly, in financial planning, one should take out time and discuss about investment portfolio with their financial adviser.
<> Take a risk and win reward
Hitting sixes and four’s from time to time involves risk of getting out. However, players always take this risk in order to build a strong score. Similarly, while investing your money, it necessary to take exposure in equities which is anyway a risky product. However, it helps in boosting your capital. Investing in equities helps in achieving your financial goal comfortably in future.
<> Have the right investment mix
A well-defined team consists of batsmen, bowlers and a wicketkeeper who help in achieving the overall target even if one of the team members do not perform better. Similarly, while constructing your portfolio, it is always advisable to have the right mix of equity, debt and gold in your portfolio because you never know which asset class will perform better in future and which will not. However, having the right mix of everything in your portfolio will definitely help you sustaining decent average returns despite going through the downturn phase of the markets.
<> Ignore the noise
Audience most of the time keep shouting to increase the morale of players. However, it actually builds pressure on them to perform well. Even in such scenario, good cricketers never get distracted and are focused on their target. Similarly, as an investor you should also not get panic with short-term rise and fall of the market, hence, you should also ignore the noise and remain focused towards achieving your long-term financial goal.
<> Identify the target person
Whether it’s a bowler or a batsman, players need to focus on each other’s strategy to know what is going to be their next aim. Similarly, while investing your monies, it is important to know your fund manager, who helps in identifying the portfolio strategy. And also, knowing the strategy will help you understand how your money is going to be invested in the several funds across sectors.
<> Analyse the performance
IPL is all about scoring and being in a super form. If a player does not perform well over a few games then in such case he may be dropped out or replaced with another one within the team. Similarly, if your scheme is making consistent losses and is not giving good returns then in such case, you may easily switch your scheme with a different scheme within the same fund house and get good returns.