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23 August 2024 at 4:29:04 pm

Uneven Greatness

India has done it again. Before more than 85,000 spectators at the Narendra Modi Stadium, the national side overwhelmed New Zealand by 96 runs to claim a third ICC Men’s T20 World Cup title and becoming the first side to win the tournament thrice. The cricketing world quickly joined the chorus of celebration. India piled up a staggering 255 for five before dismissing the Kiwis for 159, a margin that underlined their dominance in the shortest format. Opener Sanju Samson, continuing a...

Uneven Greatness

India has done it again. Before more than 85,000 spectators at the Narendra Modi Stadium, the national side overwhelmed New Zealand by 96 runs to claim a third ICC Men’s T20 World Cup title and becoming the first side to win the tournament thrice. The cricketing world quickly joined the chorus of celebration. India piled up a staggering 255 for five before dismissing the Kiwis for 159, a margin that underlined their dominance in the shortest format. Opener Sanju Samson, continuing a remarkable run of form, struck another blistering innings, earning the Player of the Tournament award. Meanwhile, pace spearhead Jasprit Bumrah delivered a devastating spell of 4 for 15 on what was otherwise a batting paradise, securing Player of the Match honours. Praise flowed freely from former England captains Michael Vaughan and Kevin Pietersen, who hailed India’s white-ball dominance, to past and present Indian greats including Virat Kohli and Sachin Tendulkar. Even across the border, former Pakistan fast bowler Shoaib Akhtar credited India’s success to deep structural strength and long-term planning. India’s captain, Suryakumar Yadav, looked beyond the trophy cabinet. With cricket set to feature at the 2028 Summer Olympics in Los Angeles, he suggested that India would now aim for Olympic gold alongside yet another T20 World Cup crown. All this praise is deserved. India has become the undisputed powerhouse of white-ball cricket. Its batting depth is formidable, its bowling attack versatile, and its bench strength enviable. Yet celebration should not erase recent embarrassments in the Test format. Barely two years ago, India endured one of its most humiliating episodes in its cricketing history when New Zealand had inflicted a stunning 3-0 Test series whitewash on India at home. It was the first time a visiting side had swept a three-Test series in India in more than 90 years. For a team that once treated home conditions as an impregnable fortress, the defeat was startling. The following season brought further setbacks against the South Africa national cricket team, underlining the uncomfortable truth that India’s dominance in T20 cricket has not translated into similar authority in longer formats. While T20 cricket rewards audacity and improvisation, Test cricket demands patience, discipline and endurance. India has mastered the first art spectacularly. The second, once its proudest strength, now appears more fragile. This matters because India is not just another cricketing nation chasing trophies. It is the game’s financial and cultural centre of gravity. When India excels only in the shortest format, the message being sent out is that spectacle matters more than substance. The country’s greatest cricketing memories - from epic Test victories abroad to grinding home dominance - were forged over five days rather than twenty overs. None of this should diminish the present triumph. But glory can also breed complacency. For all the fireworks in Ahmedabad, Indian cricket would do well to remember that T20 titles merely bring gallery applause. True greatness demands something longer.

Calculate IRR of Your Stocks Portfolio: Step-by-Step Guide

Updated: Oct 21, 2024

Calculate IRR of Your Stocks Portfolio: Step-by-Step Guide

Keeping track of how your money is growing is essential, whichever product it might be. It becomes even more important if you are handling your money yourself, especially by investing directly in shares. A critical concept for self-directed investors is understanding how to calculate the Internal/Intrinsic Rate of Return (IRR). This measurement provides a clear view of how well your investments are performing over time, accounting for all cash inflows and outflows.


What is IRR?

The IRR represents the annualised growth rate of your investments. It is particularly valuable because it considers the timing of your cash flows, such as when you bought more stocks or received dividends. The formula for calculating IRR can easily be applied in Microsoft Excel using the function: `=XIRR(values, dates, 10)’.


To calculate your IRR, follow these steps:

1. List Your Cash Flows in an Excel spreadsheet - all the money you’ve invested in your stocks (pay-ins), including dividends received and any pay-outs (redemptions). This has to be along with dates.

2. Use the XIRR formula mentioned above - the IRR function will provide you with an annualized growth rate that reflects the overall performance of your portfolio.


Why is IRR Important?

Calculating IRR is crucial for self-managing your investments. It allows you to compare your portfolio’s performance with other financial products. If your IRR is around 20-25%, it may be worth the effort to invest in stocks yourself. However, if your returns fall below this, it might be more beneficial to consider mutual funds or seek advisor’s help for investing in stocks or invest in a portfolio management scheme (PMS) of stocks. This reduces your time, efforts and resources of managing a stocks portfolio. Mutual funds are the easiest and convenient route to invest in stock markets. Some mutual fund schemes have historically delivered returns of 15-20% over 5-10 years. The returns can be higher if your mutual funds portfolio is focused on midcap and smallcap stocks. Why handle the hassles of investing by yourself when you can outsource?


Making Better Investment Choices

The IRR formula isn’t just useful for stocks. It can also be applied to various financial products, such as insurance schemes and real estate investments. By calculating the IRR for different assets, you can determine whether your investments are working as hard as they should. Understanding your IRR is vital in ensuring your money outpaces inflation and delivers better returns than competing products. Whether you’re a beginner or an experienced investor, calculating your IRR can help you make informed decisions about your investments. If you need assistance, there are many resources and experts available to guide you.


Remember, your money should work hard for you, just as you work hard for your money.


(The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal.)

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