Yoga an uncontested practice to stay fit; Maybe, its now time to learn investing from yoga too!
Mon, Jul 6, 2020 4:11 PM on Exclusive, Stock Market,
We all know Stock markets are volatile. Even when the internet is swamped with many stories on the importance of focus and long-term investments in stocks, many investors turn a deaf ear and indulge in short-term trading. They fall into the prey of futile attempts to time the market, greed while trading, and lack of focus while transacting in a stock market.
Yoga has been an age-old method for physical and mental well-being. But why?
There is a popular saying which explains this, “You cannot always control what goes on outside. But you can always control what goes on inside.”
Few people say that Long term Investing and Yoga have a similar pattern.
Let us see how!!
First of all, let us know the basics of 5 ailments as described in Yoga.
As per Yoga Sutra, there are 5 main ailments or “kleshas” which are the root cause of all the sorrows which the human faces. They are:
Avidya (Ignorance): The Sanskrit word vidya means true knowledge, a deep inner knowing, and higher wisdom. The prefix ‘a’ essentially means ‘not’, so in this sense we can understand that the word ‘avidya’ refers to a lack of knowledge or misunderstanding.
Within the Yoga Sutras, avidya is often translated as ‘misconception, lack of spiritual knowledge, or spiritual ignorance’, and it is this first klesha that is the root cause of the others – many texts even describe avidya as the trunk of the tree of suffering, with all other kleshas branching off of it.
Asmita (Egoism): First mentioned in the Mahabharata and Ramayana, the word Smita was used to describe smiling, expanding, and blossoming. This expression of Smita is a wonderful way to understand what asmita – the exact opposite – means.
This second klesha is all about letting the sense of ‘I – Me – My’ become the most important thing in life. We can see this currently in the millennial generation; the age group with possibly the strongest sense of ‘I’, but also a huge amount of emotional and psychological suffering.
Raga (Attachment): Attachment can push and pull us in all directions, meaning we’re forever at the mercy of what we need, want or like, and what we fear or hate. This push-pull effect is another way of realizing we aren’t actually seeing reality for what it really is, but reacting moment-by-moment to the personal likes and dislikes we’ve built up over time.
Dvesa (Aversion): Dvesha is the opposite of raga, aversion towards things that produce unpleasant experiences. If we cannot avoid the things we do not like we suffer, even thinking about unpleasant experiences produces suffering. We have a difficult experience and are afraid of repeating it so we reject the people, the places, and the thoughts associated with that experience assuming they will pain us again.
Dvesha also causes us to reject things that are unfamiliar to us even if we have no history of them. These are all forms of dvesha.
Abhinidvesa (Fear): The ultimate fear is the last of the kleshas, and the one that could be seen as the root of fear itself. Fear of death.
Within the Bhagavad Gita, Krishna speaks of the Self with the words; “Swords cannot pierce it, fire cannot burn it, water cannot wet it, and wind cannot dry it,” and even though it’s a hard task to ask anyone to truly let go of the fear of what happens at the end of life, releasing the grip of fearfully clinging to life can have a knock-on effect that impacts all areas of life.
Now let us try to understand how are they related to our Poor Investing Habits-
|
S. No. |
5 Ailments |
Effect on our Stock Investment Strategy |
|---|---|---|
|
1. |
Avidya (Ignorance) |
Consider a scenario of how we purchase the latest mobile/laptop. We check the features, compare prices, check reviews on the internet, ask users, and then finally zero down on our list. When making equity investments or a mutual fund investment, one needs to perform the fundamental analysis of stocks and even scrutinize the credentials of the fund manager. |
|
2. |
Asmita (Egoism) |
This is observed in a scenario of a bull market when investors book humongous profits. Engulfed in this victory, many investors wear the ‘I know it all’ attitude and become overconfident. They tend to miss the trends, start betting on risky stocks, and eventually over-leverage themselves. |
|
3. |
Raga (Attachment) |
Many investors are also attached to a particular stock and hold them for their lifetime irrespective of the downtrends. In a stock market, one needs to take a rational call and avoid any form of attachment which can lead to decisions dominated by emotions. |
|
4. |
Dvesa (Aversion) |
Due to past losses, many investors are averse to the risks associated with the equity markets. |
|
5. |
Abhinidvesa (Fear) |
This is observed in a bear market scenario or when there is a sudden and sharp fall. Many of us panic and take hasty decisions out of fear resulting in buying high and selling low. In such cases, losses are inevitable. |
This is the main reason why many investors hold back themselves from healthy investing. The magnitude of loss always surpasses the joy. To avoid this fear, many investors take the traditional route of investing in fixed income, post office savings schemes to earn predictable returns. However, equity markets have outperformed all the asset classes in the past and a Yogi who carefully invests in strong stocks for the long-term enjoys the benefits of the power of compounding.
So how can Yoga come to our rescue?
Yoga can also teach a lot about financial health. Here’s how Yoga can help you in achieving financial well-being:
1. Gain consciousness of the bigger picture: We all breathe in and out while practicing yoga to gain consciousness of our mind and body. Being aware of the options you have and the impact of these options, can help an investor to make an informed decision.
2. Practice makes a man perfect: Learning yoga asanas and becoming comfortable with it demands an investment of time, efforts, and patience. While making stock market long term investments, you need to be patient to let your investments grow while simultaneously monitoring them.
3. Life is all about balance: It is all about striking the right yoga pose to gain the maximum benefits. Stock market long term investments are also all about the right balance of stocks in your portfolio.
4. Life is too short to learn from your mistakes: A yoga expert guides you to understand when to hold the yoga pose when to breathe in and out, and the importance of each asana. Similarly, a good financial advisor conducts fundamental research so the probability of you falling into a trap is minimal. They guide you on when to exit and enter the market, portfolio composition, and the rationale behind why a particular stock is a good buy or a sell.
5. Panicking never helps: Imagine you doing a handstand for the first time, swinging in mid-air and then you try to swiftly swing your legs towards the ground. You will injure yourself, right? But what if you have calmly waited and allowed your feet to reach the earth safely? Similarly, taking an impulsive decision with regards to investments can result in financial damages.
The purpose is to achieve a state of harmony, also called ‘Sattva’. Here, investors thoughtfully invest in asset class based on their risk profile, research, and financial goal. They build a diversified portfolio based on the fundamental analysis of a stock which results in a low churning rate of the portfolio, high returns in the long-term, and financial well-being.
Happy Yoga! Happy Investing (Hopefully Soon!)!!
-CA Ayush Khetan
(Source- Internet Articles (https://researchandranking.
