The fervour of IPL is once again gripping India. However, its being played away with no audience allowed on the ground, leaving out a lot of fun from the game.
When it comes to equity investment and playing a T-20 match, many things are similar between the two. Investors can learn quite a few lessons on investment from the game of cricket. So, when we are at the topic, let’s see what IPL shares are good to add to your portfolio, which will eventually help you emerge as a winner.
Investors should exercise the same discipline in their investment like cricket to pave the way for long-term returns, say experts.
A T-20 match emphasises building a balanced team, and a bowler is equally essential in the team as the batsman. Such should be your investment portfolio, which must include aggressive performers and steady, moderate return generators for a balanced return. Like a team, all your investment in the portfolio should perform to contribute to wealth building.
A saying in the market is quite popular, ‘never put all your eggs in the same basket while picking stocks.’ Just like a coach puts in a diversified team based on each player’s strength, plan a diversified portfolio based on historical performance, fundamental analysis, economic condition, and valuation of different stocks.
Based on expert valuation, here are few stocks we think you should have in your team or portfolio to lift the trophy at the end.
Choosing The Players
Like a coach, you need to pick the players to build a winning combination carefully. For a cricket team to perform in any pitch, a balanced combination of aggressive and defensive players is important.
The opening batsman will help you open your score and give your long-term goals a strong start. You need to add some strong players from the market, which will set the base of your portfolio’s return, like Reliance.
In cricket, teams base their hopes on a strong middle-order to build a winning total. Companies that offer a steady return to investments are good choices to add stability to your portfolio with predictable cash-flow. Companies that have given a steady performance over the years and establish themselves as forerunners in the exchanges are suitable to construct your portfolio’s middle order. These stocks have a potential for long term growth and better ability to weather periodic market movements. Companies like ITC and HDFC Ltd. or TCS have been consistent in maintaining the profit and overall market share.
Lastly, you need to select players according to the pitch or the market condition, which means you need to shuffle your assets from time to time to adjust to changing market trends. Recently, pharma and IT companies had emerged as key players when other sectors suffered a set-back.
Stock Investment During IPL
In the past experts observed a correlation between the share market investment and IPL. They attributed it to the behavioural bias of investors, where stocks of the sponsor companies of the winning teams perform better in the market. Winning helps in creating an atmosphere of euphoria and a positive outlook towards the market.
IPL boosts market performance as it involves lots of commercial interests in endorsements, consumption to telecast rights. And, stocks of telecom companies see a boost in performance during IPL.
In the game of cricket, a batsman tests the pitch and wait for the right ball. An investor needs to check the market and pick stocks that are suitable to perform under the circumstances.
IPL is the biggest cricket carnival in India, has a significant impact on equity market performance. It teaches us valuable investment lessons to stay focused on the game, pick the performers carefully, and the importance of staying invested for a long-term return.