What Cricket Teaches Us About Building Winning Portfolios

If you’ve ever watched a cricket match unfold, you know this truth well: teams win tournaments, not individuals. A match-winning knock is great, but even with a match-winning batsman, you need the support from bowlers, fielders and wicketkeepers. Investing isn’t much different. Relying on a single asset class is like expecting your opener to score 350 every match. It may work once in a career, but over the long haul, you need an entire playing eleven to lift the trophy. That’s where multi-asset investing comes in.

Let’s build your investment team using cricketing logic.

Equity is your star batsman – explosive, high potential, capable of taking the game away in a few overs. But like all aggressive players, equity can be streaky. It hits centuries in bull markets but can get out for a duck during a downturn. Betting your entire portfolio on equity is thrilling, but it’s also risky; it exposes you to the full brunt of market volatility.

Debt is your frontline bowler. No fuss, no fireworks; just disciplined line and length. Debt brings structure to your innings, keeping things tight when the market starts leaking runs. In a world where equity might collapse under pressure, debt picks up the ball, keeps the economy in check, and ensures your capital isn’t battered all over the park.

Gold, and increasingly silver or other commodities, act as your all-rounder. Not always in the spotlight, but immensely useful during crunch moments. When inflation rises or geopolitical tensions spike, gold often shines, cushioning your portfolio from broader market shocks.

Throw in REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts), and you’ve got your bench strength: assets that provide income and diversification, like a handy fifth bowler or a reliable fielder who never drops a catch.

Why Multi-Asset Investing Wins Matches

Markets, like cricket pitches, are unpredictable. One year equity is smashing sixes. Next, it’s being bowled for a duck. Gold may glitter when inflation rises, but it stays flat during calmer times. Bonds might underperform in rate-hike cycles but outperform when equities tumble or when there is a rate cut. Multi-asset investing is about building a team that works across conditions.

One of the key features of multi-asset investing is rebalancing. Over time, certain assets in your portfolio will outperform, others will lag. By regularly rebalancing, selling some of what has risen and adding to what’s fallen, you maintain your asset mix. It’s like a cricket team rotating players to manage fatigue and form.

This approach also helps with behavioural control. When equity markets fall, panic sets in. But if only part of your portfolio is in equity and the rest is holding up, you’re less likely to make rash decisions. You can wait out a rough patch without pulling your investments mid-innings.

The Final Word

A good captain doesn’t just rely on one match-winner. He picks a balanced side, batsmen, bowlers, all-rounders, each with a role to play. Similarly, a good investor doesn’t chase only high returns; they build a resilient, diversified portfolio.

One of the simplest ways to access multi-asset investing is through a multi-asset fund. These funds fall under the hybrid category and provide exposure to three or more asset classes within a single investment. With professional fund management and the flexibility to adjust allocations based on market conditions, they offer a convenient, time-saving solution for investors.

Disclaimer: The Views are Personal and not a part of the Outlook Money Editorial Feature