Vrittis of Investing

Yoga is about bringing various aspects of our self into balanced harmony.

Arun Thukral

Yoga is about bringing various aspects of our self into balanced harmony. As a result, we tap into a higher, clearer energy positively affecting all aspects of our health and well-being. I am a student of Yoga philosophy and the way I look at it is that Yoga not only helps you to attain peace of mind and a healthy body but its principles have universal application including investing.
In Yogasutra, MaharshiPatanjali describes five fluctuations (vrittis) of the mind (chitta). The objective of Yoga is to calm those vrittis.

The vrittis are:

• Valid Cognition (Pramana): Pramana is knowledge backed by proof of firsthand experience that is validated. For example, using our five senses, we can say that we know what water is, because we have touched it and experienced it before. If I relate Pramana to investments, it has been proved beyond doubt that equities have beaten the inflation over long term to create wealth for the investors. However, it is important to stay invested in quality stocks over long term to build wealth.
• Misconception (Viparyaya): Misconception is false knowledge based on the deceptive appearance of that object. We can mistake a rope for a snake at night due to its deceptive appearance. Similarly, in investing, people fall into misconception such as anchoring. For example, some investors invest in the stocks that have fallen considerably in a very short period of time. The investor anchors on a recent ‘high’ and consequently believes that the drop in price provides an opportunity to buy the stock at a discount. While the overall market volatility can cause some stocks to drop substantially in value, this quite often declines due to changes in their underlying fundamentals. So, evaluate each company from a variety of perspectives in order to derive the truest picture of investment landscape, removing misconception.
• Imagination (Vikalpa): Imagination is an idea that we create in our minds. We actually can convince ourselves of a truth when in fact it is not true at all! Vikalpa can heavily influence you – causing happiness or suffering. In investing, lot of people don’t participate in equities or Mutual Funds imagining that it’s tough and complicated. This imagination may be based on hearsay. However, the fact remains that investing is not that difficult. There are MFs that have professionals to manage your money. Similarly, you can rely on research experts from reputed financial institutions with a good success ratio.
• Sleep (Nidra): Nidra is a sleep state where no other activities are present. Sleep is important to your overall health, but too much of it can also make you dull and refrain from responsibilities. In investing, your passive asset classes like deposits, gold, real estate etc are investments in the state of Nidra. It’s therefore important to restrict your passive investments to a level where it does not impact your overall portfolio performance. One must look at equity either in good quality stocks or equity mutual funds to get a much better returns over a period of time.
• Memory (Smriti): Memory is a recollection of experienced objects. Memory can influence your present situation more than you might realise. For example, the memory of a bad experience may keep you from starting a new relationship or living fully in the present moment or investing in equities for that matter.  People who’ve lost money in equities may say “Investing in Equity is bad” based on memory. But the common reasons of losing money can be because of reasons like investing based on hearsay, trading in over-leveraged products, not validating investments with expert opinion, concentrating in too few or one stock etc. Therefore, don’t base your future on past experience, but evaluate the past and learn from your mistakes.

With practice and efforts, these fluctuations or Vrittis of mind can be stilled for optimal investing.
­­—Arun Thukral, managing director & CEO, Axis Securities