However, last Sunday I was really surprised by one question, which was the type of what I would jokingly call ‘out of syllabus’. A reader from Kolkata asked if spirituality helped in investing! Now, I can hardly pretend to be an expert on the matter. In fact, there are very few people who are. Conflicting my lack of expertise, I told about something that happened to me at the time and some people close to me, based on personal experience. What can be called a spiritually balanced approach towards life certainly helps in dealing with the times when your investments are not doing well.
There is nothing unexpected in this. Those who are spiritually grounded and thus self-aware are more likely to face difficult situations of any kind equanimity, As it happens, over the past two years many people have suffered a great deal of personal stress and misery due to COVID. This has made some of them psychologically difficult, while some have had the opposite effect. The difference may well be how spiritually aware they are. I believe investors are the same. everyone investor Sometimes he goes through bad times. When those times run out, some people are afraid to leave and/or become panic-stricken. Others learn their lesson from both external circumstances and their own attitudes and actions.
Even if you’re the kind of person who wouldn’t truly self-classify as spiritual, self-awareness leans in that direction. In fact, thinking of investment decisions as external problems versus problems that have solutions within themselves, is a big difference. When I look at investing questions commonly asked by people on the Internet, an interesting pattern can be noticed. There are savers who think investing is about investing and there are others who think investing is all about themselves.
I’ll give some contrasting examples to demonstrate what I’m talking about. Here’s a real question: ‘Is it worth investing in mid-cap and small-cap mutual funds in the current stock market situation? How long will it be like this?’ This seems like a perfectly reasonable thing to ask. However, separate it from the question: ‘I am 40 years old, but haven’t started saving for retirement other than the EPF deduction. When I retire, I will need Rs 75,000 per month…’, and then there are some personal details which I will leave here.
Do you see what I’m talking about? While these are just questions that two savers asked in an email, I think it reflects their approach to thinking about investing in general. The first questioner thinks that investment decisions should be based on what is happening in the outside world while the second person sees saving and investing as a way to find solutions to their life’s problems.
There is another, even deeper, more spiritual aspect that requires you to know yourself. Different people are programmed to suffer from different levels of stress and anxiety when they face difficulty. Investment advisors love to ask their clients about them.risk tolerance’, but the answers are useless unless one has real-life experience of coping with a loss. It is on par with many other life situations. Are you going to be brave in the face of a terrorist attack? What if you get a terrible disease? Until this happens, no one knows the correct answer.
(The writer is CEO, Value Research.)