CEO Speak

The Olympic fever is on! We are all cheering Team India for every game, cherishing the glory of the wins and cheering the inspiring efforts of those players who are not able to get a medal. This is such a spectacular platform for the world of sports and indeed inspiring to see players from all around the world compete, to showcase years of hard work and practice.

I find sports and sports persons always enthuse sports lovers with a string of emotions - Joy of winning, the heartbreak of a loss, grit of an underdog, relentless dedication for the sport, the camaraderie of a cohesive team…..at the list goes on. Hence, this time around I am attempting to draw inspiration from the world of sports to the ways of investing.

3 Things we learn from sports - relevant for all investors.

Focus on the Goal Post: Every sport has a clear goal and all the players whether individuals or teams remain focused on that goal throughout the game. The goal post in hockey or the bullseye in archery - the players never lose sight of their goal. Likewise, in the world of investments, one must have a clear financial goal for which one invests. It can be a short-term goal or a long-term one, one must not lose sight of the goal for which they had started investing in the first place in the chosen instrument. Then interim market volatility should not affect the investor whose goal is to stay invested over a period of 10 years.

Team work - Diversification and Asset Classes: In team sports, every team member brings in their own strength and skill set. The individual skill sets combined with the force of the entire team drive them towards success. Likewise while investing one chooses different asset classes as per the financial goal, risk appetite and investment horizon. Each asset class has a specific purpose and having a combination of multiple asset classes is what we call diversification which brings in a unique benefit of cushioning the associated risks for the portfolio as a whole.

An athlete’s endurance is not built in a day - Start Early: Athletes train and practice for long hours and build up their strength and endurance, but more importantly if one notices most of the sports require the athletes to start their training from a very early age. Years of regular practice, every day, then give them the strength and skill to compete with the world’s best. When one wants to reach critical long-term goals like retirement corpus, it is always recommended that one must start saving as early as possible and get into long-term investments avenues like equity mutual funds. Starting early and saving regularly builds with the power of compounding, which helps to create the desirable wealth.

While we all try to get on with our businesses with the shadow of pandemic still looming at large, let us all stay focused on our goals, invest as per our risk appetite and preferably go the SIP (Systematic Investment Plan) way from the early days of our earning lives. This will help us achieve our life goals and wither through the volatile times that we are in currently.

Stay Focused. Stay Invested.

Disclaimer – The article (including market views expressed herein) is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. The article provides general information and comparisons made (if any) are only for illustration purposes. Investments in mutual funds and secondary markets inherently involve risks and the recipient should consult their legal, tax and financial advisors before investing. Recipients of this document should understand that statements made herein regarding future prospects may not be realized. Recipient should also understand that any reference to the indices/ sectors/ securities/ schemes etc. in the article is only for illustration purpose and are NOT stock recommendation(s) from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund (“the Fund”) or any of its associates. Any performance information shown refers to the past and should not be seen as an indication of future returns. The value of investments and any income from them can go down as well as up. The distribution of the article in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of the article are required to inform themselves about, and to observe, any such restrictions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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