IPL Is ON, How About Your Mutual Fund Investments?
Have you been following and admiring this season’s Indian Premier League too? Being the most ardent and enthusiastic fans of cricket, we sure are following it. This season’s IPL has been the most promising and intriguing till now. It is the world’s most lucrative domestic cricket tournament and is always celebrated like a festival in India.
It not only attracts the players from India, but it also captivates the attention of the best players around the globe. One can consider it as the shortest version of ODI or test cricket played and learn crucial lessons of mutual fund investments from the rules and tricks of this T20 tournament.
More players, more money, but only a few slots available!
Yes, this is a situation that is faced when IPL bidding war starts. The big marquee names of the cricket world are up in the war first and bidden high after considering their past performance record, the number of wickets taken, average run rate, batting average, strike rate, etc. Similar is the case with investments in mutual funds. Before holding on to or acquiring any scheme, you are required to judge it using multifarious factors such as historical performances, standard deviation, upside and downside ratio, quality of stocks, etc. These parameters help you select the big players of mutual fund industry.
Understand the Same with an Example!
Just like the aspects that help in deciding which player is a good fit in the team during IPL, the above discussed parameters help in judging a scheme as a suitable product in the basket. Suppose while making a team we have to choose between two players Rahul Dravid and Virender Sehwag. Dravid has a batting average of 40 and a strike rate of 79, and Virender Sehwag has a batting average of 35 and a strike rate of 104. Who you think will be the best bet for a team? Rahul Dravid, obviously! Though the striking rate of the Virender Sehwag is more than that of Rahul Dravid’s, but his consistency in all the matches is questionable based on his low batting average. In the same way, you should choose to invest in a scheme whose stocks have low P/E ratio and an average standard deviation.
There are some more specifics related to the IPL which if applied in financial investing will help you become the next Warren Buffet. Let’s see what these are.
- Proper Research and Analysis
Before going to start playing, the team and its captain observe and study the field or the pitch properly, and then strategize the play accordingly. Same way, investors must have a detailed knowledge about the AMC and the schemes in which they are going to park their money. - Be Daring and Not Risk Averse
No matter how good or bad is the weather, players always dare to take risk and try to make the most out of the situation without losing morale and keeping the focus intact. Investors too are suggested to be daring and should move forward with a strong focus, and do not enter and exit the investment just because of the market volatility. - Take a Break
A few minutes interval during a cricket match is a necessity, spectators get rest and more chips, and the players get to strategize and modify their game for the next half. Similarly, in financial planning, investors should take a break from the regular investment schedule, and talk to the financial advisers about the current portfolio they hold. - Build Strong Score Card
You might have seen players taking risk and hitting sixes and fours whilst risking their wickets in order to bring win for the team and build strong score. Equivalently, investors should not constrain themselves and become risk averse. In order to build a strong portfolio, they should take exposure in equities which can help boost their investment.
IPL has made its viewers an addict and they have been waiting to know who will survive till the end and land up as a champion with the trophy in hand. To become a blue-ribbon, the most needed quality is perseverance. Be it IPL or investments in mutual funds, you are required to show discipline, dedication, and patience. No matter how sooner or later you achieve win or success or goals, what matters is the path you choose to achieve it. This IPL season-‘Do not just warm your bench, get out and play!’
And by playing we mean to play to know your luck. Start a SIP of Rs.1000 in an equity fund for a minimum tenure of 3 years from our portal and win a chance to get this season’s IPL tickets. We will be declaring the names of the winners through a lucky draw. So do not delay and miss the golden opportunity, Hurry Up!!
