Team and Asset Allocation

Now days everybody is talking about two things one is cricket and other is stock market. Whether it is IPL matches or advertisement going between them ( Groww, Upstox, Mutual fund sahi he). I just wondered why stock market ads are playing between the IPL and not of some beauty products. Then I realized that both stock market and cricket are same in many ways…….
You want to know how………????????

Lets start

Team and Asset Allocation

If I told you to build a Cricket teams for me will you going to select all the batsmen or all the ballers? I think your answer will be a big NO.
Now apply same logic in stock market while forming your Portfolio you can call it as your team and then add some batsmen(equity), some ballers(debt), some all-rounder(gold), wicket keeper(alternate investment). You can’t just say that i want to make a strong batting team or strong balling team. If you do so you will probably end up by losing the match. You have to make combination of batsman and baller to form a strong team & your team selection will depends on factors like pitch, weather condition, opponent and other factor
The process of team formation in stock market is called Portfolio & batsmen (equity), baller (debt), all-rounder (gold) are different Asset Classes. Pitch, weather determine will going to decide how much batsmens and ballers will going to play in your team just like that your risk appetite, your investment horizon will going to decide how much you will going to allocate in equity, debt, gold & alternate investment (say real estate)

Just like to win a match every player is important in same way to earn good consistent return on your portfolio Asset Allocation is required.

Just like this I will going to share financial Concept with the help of cricket. If you like it please do comment.