It is that time when you are cheering for your favourite team in T20 cricket. You spend hours reading up about the make-up of the teams. So much so that even the player auction of the Indian Premier League or IPL was broadcast live. A lot of the game is played ‘off the ground’ with strategy. The team owners and coaches are sifting through player profiles. They choose the right combinations that they think could work for them. Budgets are finite, so there is a need for a balancing act.
Investing is no different. You need to spend time reading about it. You need to think about the portfolio you plan to create for your financial well-being. There is a lot of analysis online to guide you to choose the sectors that fit your financial vision. Like a T20 league works with a coaching staff and managers, you need to work with your financial advisor. You can pick the right combination of sectors that help you achieve your financial goals. Your income is a source of your investment. You need to manage your monthly expenses to have an adequate surplus to invest in regularly. Your financial advisor would help you make the proper asset allocation or choose the right sectors to get underway.
Building a team
A T20 cricket team needs a diverse pool of talent. You need solid batters at the top, all-rounders in the middle and fast and spin bowlers. Withing spin bowlers, you need to choose between a wrist spinner or a finger spinner based on playing conditions. Similarly, choosing your sectors requires careful examination of trends in the market. There are internal factors and external factors that influence markets. At Alphaniketan, we have often talked about these issues to help you analyse them. You need to choose sectors that are on the growth path. Top companies in those sectors are bound to outperform the rest. Most institutional investors buy Indian shares for the high return on equity. With an average GDP growth of 7% for the next couple of decades, Indian shares are likely to remain an attractive proposition for most investors. Companies that ride on Indian GDP growth are likely to find favour with them.
Use of technology
In T20 cricket leagues, teams analyse performance with the help of technology. They identify the strengths and weaknesses of opponents and plan their team strategy. They analyse playing conditions like the type of the cricket pitch or dew in the evening to determine the final 11 players that play the game. Similarly, technology is a significant enabler in investing. Big data and analytics can help you choose your portfolio. Today, you can either hire an expert to help you choose the right combination of sectors for your portfolio or use technology.
There are many things about your favourite sport you could use while investing. As a batter, your temperament is essential if you adapt to different game formats, pitch conditions or bowlers. That applies to bowlers too. They have to adjust their line and, length, speed based on the format of the game they play. Your temperament will determine the nature of your wealth creation. If you invest regularly and keep the scoreboard ticking, you will have enough for your future. If you sell early, you will not benefit from the power of compounding. Just as a player would stick to basics, so should you as an investor.