In a cricket match, when the batting team loses too many wickets quickly, the strategy of the batsmen on the pitch is to just simply rotate the strike, take singles and keep moving up the scoreboard.
Batsmen in such situations don’t try to hit all the balls nor they leave the pitch. They do what they need to do. Manage the singles and keep moving up slowly.
What if they just leave the pitch as it looks difficult to win or they start hitting sixes hoping they may just get it right if they hit the ball. Would we like that?
Every team and batsman find themselves in such situations very often. They are trained to handle such situations unemotionally.
The ones who become expert in managing such situations, become key players of the team for years and enjoy success, name and fame.
Others who keep giving up wickets easily due to sheer pressure or risky shots, are not able to get into that “performance zone” ever.
In investing journey, every few years risks start increasing in our investments. At such times, we need to identify and quantify risks objectively. We need to keep moving up slowly. We shouldn’t leave investing or take unwarranted risks because of a pandemic or financial crisis. We need to slowly reduce risks if our investments have become risky and start taking long term decision one be one and soon we shall be out of the crisis. Once we do that, we will move into that “wealth creation zone”.