Having a spiritually balanced outlook towards life helps one deal with those times when your investments are not doing well. 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 covid. 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 sometime or the other. When those times are over, some get scared into quitting and/or become panic-prone. Others learn their lessons, both about the external circumstances and about their own attitudes and actions. (Text by Dhirendra Kumar. He is an author and also CEO, Value Research)
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Self-awareness
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 versus 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, 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.
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Outlook
Here’s one real question: ‘Is it advisable to invest in mid-cap and small-cap mutual funds in the current situation in 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….’.
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Attitude towards investment
While these are just questions that the two savers asked in an email, I think it would reflect their attitude towards 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.
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Risk tolerance
There’s another, even deeper, more spiritual aspect that requires you to know yourself. Different people seem programmed to suffer different levels of stress and anxiety when they are faced with hardship. Investment advisers 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.
