You must be surprised after
reading the title of this article as there could not be any relation between
your finances and FIFA world cup until and unless you are into betting. Still
there are many lessons that can be learnt if you analyze the complete situation
of the current FIFA world cup. Here are some of the insights that I have analyzed and want to share with you all.
Never
rely on Past performance:
Everyone is betting heavily on
Spain's performance this world cup as they are the defending champions. Now the result is in
front of all of us, they are not even able to clear the first round and are out of
the world cup.
Same goes with our investments as well. Some plan does well in past does not guarantee its
performance in the future. Past performance is always one of the
criteria to consider one particular stock or mutual fund or any plan, but it’s
not the only criteria. Always have a thorough study of the plans you want to
invest into before actually making any investment decisions.
Don’t
let your emotions overpower your decisions:
In the match between Germany
and Portugal, one of the Portuguese players – Pepe got carried away and head butted
one of the German players. This resulted into his exit followed by a RED card. There was no need to do so and the 10 player Portugal team ended up on losing
side.
Similarly in case of making any
investment decisions, don’t let your emotions overpower you. As a human we have
a tendency to remember our bad moments for the life time and forget the good
ones very quickly. Same logic follows in our financial life as well and we
refrain ourselves from taking a look to those plans again which haven’t
delivered good returns in the past. This is a dynamic world and things keep on
changing every other day. Lot of regulatory agencies constantly trying to protect
investor’s interest and thus companies have to adhere to these changes and they
keep on implementing the same to their products as well. Thus if most of us had
burnt our hands with ULIP plans in the past it does not applies same for today
as well. Always make your decisions based on facts and not on sentiments.
Don’t
get carried away with success:
In the match between Netherlands and Spain, Spain was the one to
score first goal of the match. There won’t be any good start for the defending
champions to this tournament. They got carried away after that and lost the match
with a score of 5-1.
Similarly if one of your investment results into very good
results it does not mean you don’t look at other avenues and start investing in
that particular plan only. As the famous saying goes, don't put all your eggs in one basket. For example, if you have invested in Gold in early
years it would have delivered you huge profits but if you keep
continuing this investment even in the year of 2013-14, you have ended up
with loses.
One good stock pick won’t make any one an expert. If you
don’t have sufficient time and expertise, Mutual Fund is the best way to
proceed forward.
Consistency
is the KEY:
As we know Germany is one of the consistent performers in all
the big tournaments, they have won 3 world cup titles and 3 European
championships. They are doing well in this world cup as well.
Similarly in the financial field if a stock or a particular
Mutual fund is performing well over its peer in the long term than it’s surely
one of the safest best for you to invest into. Always try to track the last 10
year performance of any Mutual fund or stocks before actually investing in the
same. Never get carried away by the schemes which promise to make you rich
quicker. Choosing consistent performer over rising star is always a better bet
especially for someone having low risk appetite and limited income.
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