Investing Lessons from Our Champions

Much has been said and written about the achievements of our star sportspersons. Take for example, the Rio Olympics 2016. By now, we all know quite a bit about our champions – the colour of their medals, the names of their hometowns, the coaches who trained them and the spectacular feats which brought them ultimate glory. While we may have personal favourites, most of us are on the same page when it comes to acknowledging the grit of our badminton champion, the determination of our wrestling medallist and the courage of our gymnast. These champions will inspire many people – both in and beyond the arena. Their feats, though unique, have the generic elements of all great achievements. When applied sincerely, these elements bring success in all fields – including investment.

The basic principles inherent in the grooming of a champion sportsperson – whether an Olympian or a cricketer – are no different from those followed by astute investors. These principles include:

1. Starting early: Creating or achieving something worthy takes time and practice. Our star shuttler started training when she was eight years old, while the gymnast began practising at the age of six. An early start helps you to devote more time and effort towards achieving your goals. While investing, starting early gives you a double advantage – you not only get to invest more amount of money but also earn higher returns owing to the power of compounding. It's thus essential to start investing as early as possible in order to achieve your goals.

1. Being disciplined: Watching international sports events is a pleasure – especially when you get to cheer on players from your country. A gripping badminton match of around 23 minutes, five aggressive bouts of wrestling and a few minutes of artistic gymnastics were events we watched with great delight. However, we missed something. What we did not see was the effort that went into the outstanding performances. The winning smashes, hard knocks and swift vaults were products of a disciplined routine which included waking up daily at 4:30 am, practicing relentlessly for 8-10 hours each day and adopting a strict diet and exercise regime. Discipline, when applied to any task, leads to success. This is also true with respect to investing. Successful investors follow a disciplined approach towards their finances by prioritizing savings, investing regularly and following a prudent asset allocation strategy. More importantly, they have the diligence to follow such an approach over the long term, without getting bogged down by market conditions or setbacks.

1. Taking professional guidance: When asked to whom they give credit for their achievements, most champions named their coaches. A coach is responsible for guiding, training and motivating students, thereby enabling them to achieve their best. Professional guidance is essential for excellence in academics and sports. The same goes with investing. Professional fund management enables you to choose appropriate investment options, make disciplined investments and invest for the long term, thus helping you to maximize returns from your investments while maintaining prudence.

1. Not being too risk-averse:  Although she missed a medal by a whisker, our gymnast created history by completing the Produnova, one of the most difficult vaults in gymnastics, which has been performed successfully by only by five gymnasts till date. The key takeaway from this feat is that for achieving the extraordinary, it's imperative to take risk. You can seldom accomplish something significant by sticking to your comfort zone. This also applies to investing. To earn better returns, you need to invest in asset classes which, though riskier, have the potential to deliver higher returns over the long term. These asset classes include gold and equities. It should be noted that taking risk doesn't mean being reckless. The idea is to learn how to manage risk in a way that lets you maximize rewards. For this, it's beneficial to get help from professional fund managers.
2. 
   Challenging orthodoxy: Our first medallist at Rio Olympics 2016 hails from a village where it's taboo for girls to pursue wrestling. However, she challenged the regressive customs and went on to create history. Orthodox attitudes are found in various spheres, and investing is no exception. Many times, investors hesitate to explore unconventional investment options (equities, in the case of Indian investors), thereby missing out on the high return potential inherent in such investments. In order to avoid losing such opportunities, it is essential to challenge orthodoxy by mending our attitude and actions.

Investing can be compared to a sport which is essential for a healthy financial life. Like sports, to excel in investing, you need to practice regularly, stay disciplined, avail professional guidance and manage risks. Starting early surely gives you an edge. However, not all is lost if you haven't begun early.  Just as you can opt for a sports activity at a later stage in life, investing can also be given the due importance at any point of time. Once that's done, you can sit back and reap the rewards from the positive changes to your financial life.

Disclaimer, Statutory Details & Risk Factors:

The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

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Please visit – www.QuantumMF.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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