Wednesday, December 4, 2013

“Understand Equities – The Sachin Tendulkar Way”

“Understand Equities – The Sachin Tendulkar Way”

  • Consistency:- As we all see in case of Sachin (24years of consistency), practise makes perfect – so true with Equity too, (17% plus CAGR in last 30 years) Equity gives you constant returns over a period of time. Like Sachin takes 1s and 2s and hits fours and sixes whenever the right delivery bowls over, in Equity it’s also proven that one should at least stay invested over a longer period for making good inflation adjusted returns.
  • Aggressive Stance:- We have seen Sachin being aggressive at times. We have a lesson to learn here. One should invest in equity aggressively, whenever market goes down and sentiments are very low, when no one talks about equities, that is the time one should get aggressive and allocate more money to equity, you can get better returns, on the other hand when people around you get bullish on equity, everyone talks about equities, then that time is to allocate less amount in equities.
  • Commitment:- Like Sachin’s commitment to Cricket in last 24 years, one should with the same dedication, work towards their financial goals & allocate their money in equity on the basis of  their goals, time to achieve the goal, the risk you can take to achieve, and of course the emotional tolerance of risk taking (losing money if something goes wrong).
  • Powerful:- Sachin is too powerful when it comes to his signature cover drive, the same way when you invest in equity on regular basis, with consistency, commitment & aggressiveness – Equity gives you power of compounding effect, it takes years to be Sachin tendulkar, practising every day like Sachin did it every time before his match in last 24 years. The same way one should start investing in equities at early stages of life and keep investing on regular basis.
  • Performance: - Have you seen Sachin not performing in many matches right? Getting out in matches on zero and 1 and 2. So as equities, it’s the nature of equities to be volatile, off course they do not perform every day, it’s not easy to make 100’s in every match you play– impossible right? But when it comes to performance – we should see it over a period of time,yes time! You need to give time to equities, in the end they perform. Patience pays.
  • Super Great Results :- Sachin Tendulkar after a 24 year cricketing span, will now be awarded by Bharat Ratna – the same way equity will pay you heavy, compounding super rich returns if you stay invested for next 24 years.

As we say, Rome was not built in a day, one can’t be Sachin without practising for years, the same is the case with equities. It takes time to get multiplier effect, fasten your seat belt and stay invested for years.

Like Sachin will always remain as an example of the best in Cricket – Equity will remain superior in class as the only category among investor since 1979, which has given super returns than any other asset class in India.

So, if you want to be Sachin in terms of wealth, follow equities – understand equities. Start with small amount – Decide your goals – Stay Invested in Bad Times – You will be rewarded by a Bharat Ratna of Equities by Market.