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Guest Column Investing lessons from Yoga

Investing lessons from Yoga

How can you apply the principles of Yoga to investing?
Karan Datta Jul 5, 2018

The world is waking up to the benefits of Yoga and its contribution to a healthy mind and body. However, Yoga is not just asanas. Just as practice of Yoga can help us stay healthy and be at peace, some of the basic yogic principles can also be applied to investing, helping an individual make wise investment decisions, create wealth and fulfill financial goals.

Let us dig deeper into some of the basic yogic principles and how these can be applied to investing.

Take the right path to attain financial goals

In Yoga, there are certain root causes, which serve as an impediment to spiritual growth because they distort our mind and keep us from seeking the truth. In the world of investing also, some root causes can prevent one from attaining one’s financial goals.

One root cause could be ignorance. One can easily infer that in the world of investing, ignorance can result in making incorrect investment decisions, thereby affecting financial well-being. When investing in mutual funds, you need to be aware of the product, how it works, the associated costs, the risks that come with it and so on.

Another root cause could be avoidance. In investing, avoiding asset classes like equity can be detrimental to an investor and keep him from growing his wealth over a period of time. Even if you do not want to invest in direct equity, mutual funds are a good way to get equity exposure and reap the benefits of the growing markets. Mutual funds are well-regulated investment products, which offer the benefits of professional fund management, liquidity and low cost. These products also offer the benefit of regular investments with SIPs.

Be the virtuous investor

Yoga preaches the virtue of non-possession or non-greed. Excessive greed can lead an investor to make crucial investment mistakes. Some of these could involve investing in SIPs with a short-term horizon to reap the benefits of a bull market, stopping SIPs when mutual fund valuations go up or taking higher than required exposure to product categories without understanding the risks associated with them. While an investor needs to maximize the investment returns, it is also important to control greed as the principle of Yoga embodies.

Yoga also teaches self-study and self-reflection. One of the interpretations of this is the knowledge of sacred scriptures or any form of literature that helps one to gain knowledge and wisdom. Similarly, in investing, it is important for an investor to educate oneself about investing in various instruments, especially in mutual funds. With such a variety of mutual fund schemes available in the market, it is important to focus on various factors such as the track-record of the fund house and fund manager, their investment philosophy, the scheme objective, scheme performance, other costs like expense ratio and exit load and tax implications. While a good financial advisor can help, it is important for the investor to make an effort to understand the nuances of investments too.

Discipline is the key

It is believed, without self-discipline one cannot experience the positive effects of Yoga. In the world of investments, especially when investing in mutual funds, SIPs are the key to ensure discipline in investments. Investment in SIPs, as we know, enables one to invest regularly in a disciplined manner to achieve financial goals without trying to time the market.

While principles of Yoga, which apply to the world of investments, are non-exhaustive, the above virtues can be a good start towards the right financial path.  Apply these principles to achieve a healthy life and financial well-being for your clients and you.

Karan Datta is the Chief Business Officer at Axis Mutual Fund. The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.

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