Key investment lessons from India’s ICC World Cup exit
While there is a general feeling of gloom at India exiting the ICC World Cup in the Semi-Finals, there is an undoubted sense of irony in the situation. It was supposed to be an Australia versus India final but neither of the teams has really qualified for the finals. For an investor, there are a lot of critical lessons in the semi-final losses that India and Australia had to go through. Here are a few!
Avoid over-dependence
Both in the case of India and Australia, the big problem was the over-reliance on the top order batsmen. In fact, in both the case, the middle order was extremely brittle which got tested in the semi-finals when their top order failed. This applies to your investments too. Avoid a situation where the returns of your portfolio are too dependent on a handful of stocks or a handful of factors. Diversification can be a force multiplier in most investment cases.
Play to the conditions
This was starkly revealed in the India versus NZ match. Kane Williamson and Taylor curbed their natural strokes and adapted to the conditions and grafted their innings. In the end, they managed a decent winning total. That applies to your investments too. You can’t go around with a fit-all strategy. Work with a Plan-B. Above all, have a strategy that is flexible enough to change with the changing market and macro conditions.
Winning the key moments
As Kohli put it eloquently in the post-match conference, they lost the game in the 45 critical minutes. India lost those key moments when they allowed NZ to build a partnership and when the top order failed. This applies to investments too. Your losses and profits are never consistent but depend on a few moments of good or bad markets. Be prepared to ensure that you capture these key winning moments in your investment plan. That is what makes the difference to your returns.
Never let things drift
Be it cricket or your money, never let things drift. Take corrective action immediately. Unlike India, Williamson never let up on the pressure and kept setting attacking fields. This forced errors. It always pays to be in full control of the situation.
Learn to move on
Well you have bad days in cricket and you also have bad days in the market. For Indian cricket, they will have to wait for another 4 years for their next attempt at the World Cup. It is really not so bad when it comes to your investments. But, the key lesson is that you have to move on. Let your current setbacks not impact future strategy. That is perhaps the most important take-away from the ICC World Cup!
