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Spirituality and investing

Like many other aspects of life, having a spiritual self-awareness makes you a better investor

Spirituality and investing

Every Sunday evening, I do a half-hour Q&A show on All India Radio where viewers call in with their investing queries and I answer on live radio. This has been going on for more than a decade and I quite enjoy a format that is so different from writing articles and even being on TV. Over the years, through hundreds of shows and thousands of callers, I have become quite used to the kind of questions that come because after all, there are only so many things that investors can ask about investments. The specific funds and circumstances change, but the themes remain the same.

However, last Sunday I was genuinely surprised by a question, which was of the type I'd jokingly call an 'out of syllabus' one. A reader from Kolkata asked if spirituality helped in investing! Now, I can hardly pretend to be an expert on the matter. As a matter of fact, there are very few people who are. After protesting my lack of expertise, I did point out something that occurred to me at the moment based on personal experience and that of a few people who are close to me. Having what might be called a spiritually-balanced outlook on life definitely helps one deal with those times when your investments are not doing well.

There's nothing unexpected in this. People who are spiritually grounded and are thus self-aware can face any kind of tough circumstances with greater equanimity. As it happens, over the last two years many people faced a huge amount of personal stress and sorrow because of the Chinese virus. This has made some of them psychologically tougher, while it has had the opposite effect on some. The difference could well be because of how spiritually aware they are. My sense is that investors are the same. Every investor goes through bad times sooner or later. When those times are over, some get scared away and/or become panic-prone. Others learn their lessons, both about the external circumstances and about their own attitudes and actions.

Even if you are the sort of person who actually would not self-classify as spiritual, self-awareness leans in that direction. In fact, thinking of investing decisions as external problems vs problems whose solutions lie within oneself is a big differentiator. When I look at the kind of investment questions that people ask - on the internet generally, and on Value Research Online, there's an interesting pattern that can be observed. There are savers who think that investing is about investments and there are those that think investing is about themselves.

I'll give a pair of contrasting examples to demonstrate what I'm talking about. Here's one real question, 'Is it advisable to invest in mid-cap and small-cap mutual funds at the current situation of the stock market? How long will the conditions remain like this?' It sounds like a perfectly reasonable thing to ask. However, contrast it with this question: 'I am 40 years old but haven't started saving for retirement, apart from the EPF deduction. When I retire, I will need Rs 75,000 a month....', and then there are personal details that I'll omit here.

Do you see what I'm talking about? While these are just questions that the two savers asked in an email to Value Research, I think it would reflect their attitude to thinking about investment in general. The first questioner thinks investing decisions are to be based on what's happening in the outside world while the second one sees saving and investing as a way to find solutions to the problems of one's own life.

There's another, even deeper, more spiritual aspect that requires you to know yourself. Different people seem programmed to suffer different amounts of stress and anxiety when they are faced with hardship. Investment advisors are fond of asking their clients their 'risk tolerance' but the answers are useless unless someone has had a real-life experience of facing losses. This is equivalent to many other life situations. Are you going to be brave when faced with a terror attack? If you get a terrible disease? No one knows the true answer till it happens.

Suggested read:
For investors, the most important decision
In uncertain times, focus on the certainties

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