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The term ‘Investment’ generally refers to the allocation of money with the expectation of a returned benefit in the future. Well, with the current season of FIFA World Cup, it sounds familiar, right? Yeah, it’s like managing a football team hoping to get the coveted World Cup in return of your display of football skills.
Sometimes it goes well as expected and sometimes it doesn’t. Not every return is fruitful; sometimes your happiness comes at someone else’s expense. Some coaches retain their job; some get fired. Same is the case with investment, not everyone who invests is lucky enough. However, long-term investing definitely does the trick.
Let’s look at some investment lessons from football.
1. Choosing the Right XI
A statement very common in the field of mutual fund investments, as well as football, is that “Do not put all your eggs in one basket”. It’s very important to choose your starting XI and that too with a definite and balanced formation. The correct arrangement of players in their assigned position helps to win the match.
Similarly, the placement of debt and equity, when done aptly, can also lead to the profit of investors and if not, then facing loss is inevitable. However, do not over-diversify. The key is to research and identify the right mutual fund investment to gain for lifelong return.
2. Understanding the Strategy
One must have a definite strategy while investing. Consistency is the key to mutual fund investments, just as it is necessary to maintain consistency for every player to win a match. In a team game, one man can’t determine the results unless others are consistent and helpful enough to support him.
Strategy plays a bigger role in both- football and investment. Unless you are well-prepared, you cannot proceed to win the game.
3. The Need for Efficient Supporting Staff
A supporting staff is just as important as the coach. Without proper assistance and medical staff, along with managers, the coach can’t handle the team single-handedly. Same is the case with a mutual fund investment.
Funds, both open-and closed-ended, hire managers who look after the ups and downs of various portfolios. Without them, investors cannot advance. You need someone who can assist you in every step of financial investment to get solid results.
4. Today’s Pain-Tomorrow’s Gain
Sometimes for the betterment of the team, the team coach takes risk by deliberately keeping one of its main players out of the team.
Just like that, the investor can sacrifice a minimal amount of his/her fund by taking a risk for the upcoming profits for long-term plans. However, you need to be very alert and take wise decision before sacrificing minimal amount.
5. Need for Patience
Football is a game of 90 minutes, and one mustn’t lose their patience until the game is over, as results might change even before the last second of the match.
Patience is the main key in this case, and it’s better to sometimes consult with the support staffs or managers before taking any big decision. Similarly, with mutual fund investments, the key is to invest for long-term and patiently wait as your returns grow.
6. Never Forfeit
One of the most frustrating feelings in the world is to lose a game by forfeit. It means that for one reason or another; you couldn’t put a team on the field and had to give up without even trying. It’s a lousy way to lose a sports competition, and even worse when applied to investments.
The investment industry is truly one of the most confusing places to navigate, sometimes even for experienced investors. Hence, sometimes investors tend to get so confused when they are served with various offers, claims, and strategies that they do nothing and forfeit the game. However, no one won by leaving the field mid-way. So, get into the investment mode and invest regularly every month, without fail.
Conclusion:
Overall, to conclude, just like football, finance as well is competitive on an intense level. Moreover, complete planning and understanding on investment is a part of the process, which you cannot afford to ignore.
Krishan Jangir