The month of August brought in bad tidings for Indian cricket fans as the Indian team was decimated in a humiliating 3-1 test series loss to England. While Alaistar Cook and his men seemed to be in the top of their form, nothing seemed to work for our boys in blue. To simply say that it was a stroke of luck does not exonerate the cricketers of their responsibility.
Story: Likewise, if you do not pay attention to your finances and make all your investments work together as a team you could face dire consequences later in life.
However, we are not here today to criticize Dhoni and analyse what he and his men did wrong. Like every cloud has a silver lining, we believe that there are lessons to be learnt from every failure, however severe it may be. If you are die hard cricket fan who is still smarting from the humiliating defeat and can?t get yourself to look at another cricket match India plays of now, we suggest you apply some of the lessons learnt to your financial plan and it will surely benefit you in the long run.
Give careful thought to your selection: One of the major reasons why team India failed was the fact that the team seemed ?hastily arranged? vis-a-vis team England that was selected carefully as per their skill set. Thus, they did exactly what the situation demanded of them. Similarly, if you do not give careful thought to your investments and just pick some assets based on some advertisements on television or by way of ?tips? you may have heard from friends, they may not be the right match with your financial plan. As a result, you will never be able to meet your financial goals and are not likely to have the funds when you need it the most.
Do not depend overtly on one asset class: While team India put up a poor show on foreign shores, Captain Dhoni held his own, putting up a brave front for the most part of the series. But in the end, he too succumbed to the pressure that was inflicted upon Indian batsmen by the English bowlers. From this example, you can learn that over -dependence on one asset class may make your portfolio lopsided and may spell doom in adverse market conditions. You should therefore construct a well-diversified portfolio, so that even if one asset does not perform, there are investments spread across other asset classes, whichgive you the desired rate of returns.
Have the ability to make your portfolio perform in adverse conditions: One of the questions that was raised after India?s defeat was the inability of the Indian cricket team in unfamiliar conditions. However, it has been pointed out by Captain Dhoni himself, the wicket was good and there was a nice bounce and pace to it, that the English players could take advantage of, but the Indian players could not figure out how to make of most of the same situations.
Likewise, there are times when there are adverse macroeconomic conditions that will have a negative impact on your portfolio. Instead of panicking and taking wrong decisions, see if you can make some subtle changes to your portfolio like booking profits on some investments or consolidating your portfolio to some extent under such conditions.
Learn from your mistakes: In a last ditch attempt to salvage his team, the Indian skipper said that most of his teammates lacked in experience as far as international test cricket is concerned and he hopes that with this defeat that they have had to suffer and gulp down, the cricketers who have so far been basking in the glory of the Indian Premiere League will come out stronger and wiser and learn from their mistakes.
Similarly, there will be times when you have chosen a particular investment thinking that it will augment the value of your portfolio, but it ends up doing just the opposite and eroding value, because it?s just not the right thing for you. In times like these, do not lament on your losses, but take a lesson from it and move on. It will make you wiser and you will be even more careful while choosing the investments that will be the right fit for your portfolio.
As you can see, there are lessons to be learnt from a defeat as well. So like we just said instead of lamenting on India?s losses, take a re-look at your portfolio and see if there is scope to improve its performance by applying some of these lessons our cricketers learnt the hard way on the pitch.
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