Asia Cup: 7 Finance/Investing Lessons to Learn from Cricket

Although cricket fever never runs out of all the Indians, this time, the fever seems to be relatively high due to the ongoing Asia Cup 2023. We are wrong when we say cricket is just a game; it teaches strategy, patience, technique, guidance, and whatnot. All these terms also seem familiar to investment and financial planning enthusiasts.

And if you have yet to become one or are new to finance, we discuss 7 finance and investing lessons you can learn from cricket. Remember, an investor shapes their investment portfolio like a cricketer develops their gaming strategy. In the same context, why not pick up some investing lessons from the game of cricket?

Understand the Pitch You are Playing On – Assess Your Financial Profile

Like a cricketer inspects the pitch and the weather before a game, understanding the financial climate will aid your investment trip. This entails assessing your income, liabilities, long- and short-term investment goals, knowledge of various asset classes, and risk tolerance. Making these arrangements will be essential to your investment plan.

Protect the Wickets – Keys to Securing Your Finances

The players put their entire effort into preserving their stumps and wickets in cricket. Likewise, in the game of finance, three stumps must constantly be defended: an emergency fund (reserve bench in cricket), regular income (the playing 11), and growth or appreciation (run/strike rate). Save for a rainy day. Remember to keep the funds liquid so you can get quick access to them in times of need. And with other investments, go along. Avoid the impulse to sell investments as soon as they generate profits.

Persistence is the Key to Success – Invest Consistently to Enjoy Higher Returns

They say you must be consistent to win any game, big or small. No player could imagine scoring a century and doing nothing in the following game. Each cricket player must contribute, no matter how modest, to every game they play. The same holds for your investment plan. You must continuously make investments to guarantee that they are regular to accumulate wealth over time. This will have a minimal effect on your monthly expenses while assisting you in achieving your primary objectives.

Master Multiple Skills – Invest in Diverse Assets

A cricket team would be ineffectual if it lacked a superb balance of skills that could handle the game’s obstacles, including batting, bowling, fielding, and wicket-keeping. Similarly, investors must diversify their portfolios to lower risks, smooth returns, and enjoy greater long-term performance. One can invest in various asset types, such as fixed income, equities, real estate, or commodities, depending on their risk tolerance and market cycles.

Look Forth – Avoid Dependence on the Past Performance Alone

The finalisation of a cricket squad is based on a player’s present and prior performance and form. Although it is held that “Form is Temporary, Class is Permanent,” they do not solely rely on prior performance. The same rule applies to the realm of investing; an investor shouldn’t base all of his investment choices just on how a company’s stock has performed in the past. He should ascertain the company’s valuation instead, look into its prospects and risk tolerance and then decide whether to purchase those shares.

Keeping Your Focus on the Ball – Don’t Let Short-term Market Lows Distract You

Just as a fielder in cricket keeps his eyes on the ball to win the match, an investor must be vigilant. Like in cricket, investing is about remaining focused and disciplined, keeping an eye on the highs and lows, and being prepared for curveballs. It’s crucial to continue investing during ‘low’ market conditions, even if these are little sums, as rotating strikes keep the scoreboard moving.

Never Forget the Importance of Coach – Seek Professional Financial Advice

No matter how seasoned the players are, you must pay attention to the advantages of having a strong coach in charge. A competent coach will keep an eye on you, be aware of your potential, and know how to push you to perform at your best. The same is true with investing, where you need to rely on a personal financial counsellor for guidance. Financial planners and advisers guide clients on wealth management and other facets of their personal finances. Always ensure your financial advisor abides by fiduciary standards, which are the rules that force them to act in your best interests and disclose any conflicts of interest.

Conclusion

Like renowned cricketers Sachin Tendulkar, Mahendra Singh Dhoni, and Kapil Dev did in their careers by remaining composed and tenacious, investors should have sufficient knowledge, patience, and professional advice to achieve their financial and investing objectives.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.