As a finance professional and Yoga practitioner, I am intrigued by the connection between how principles of Yoga can be applied to make the right investment choices. Most people relate Yoga to asanas (yoga postures). Asanas are but one of eight limbs of yoga as laid out by the Indian Maharishi Patanjali, author of ‘The Yogas tra’. They are Yama,Niyama, Asana, Pranayama, Pratyahara, Dharana, Dhyana and Samadhi. So yes, asanas play a part in yoga, but they are certainly not the whole.
Yoga is about bringing various aspects of our self into balanced harmony. For instance, Patanjali Yogasutra says that there are three gunas always present in all beings and objects surrounding us but vary in their relative amounts. These gunas are Tamas — the power of inertia, Rajas — the power of energy and Sattva —the power of harmony. A balance in our individual mix or the three qualities can also help us invest optimally
Tamas – State of inertia
We see a lot of people saving all their hard earned money in various fixed income products. I am consciously using the word “Savings” and not “Investments” as savings is done with the intent of capital protection and investments are done for capital growth. Savings in fixed income products do not yield significant real rate of return if you take inflation and tax into account. Therefore, the savings remain in a tamsic state or a state of inertia/inactivity. Fixed income should still form an
essential part of one’s overall investment portfolio. However, one must be mindful of the allocation. A disproportionately higher skew would mean underperformance of portfolio and vice-versa may mean an aggressive or risky portfolio.
Rajas – State of energy
Rajas is an aggressive guna that is more prevalent among active stock traders. They want their money to be in constant action and movement. They get thrill from trading in stock markets mostly in the short term. I am again consciously using the word “Trading” here and not “Investing” as the intent of trading is to generate quick return in short term vis-a-vis long term investments for wealth creation. A trader doesn’t go through the fundamentals of a company in detail as an investor does. He’s only focused on “what’s happening now, and how can I profit from it”. A trader typically trades in leveraged products like intraday, futures and options. If you are high on rajas or energy and your personal trait is that of a risk taker, if numbers and chart patterns are something that you catch your attention, then maybe you should explore trading backed by strong technical analysis or expert advice.
Sattva – State of harmony
Sattva is the guna that reduces rajas and tamas. This guna brings harmony. This is the most desirable guna or state in investing. Investors with this guna invest across various asset classes basis their goals and risk profile. They realise that equity as asset class can reduce tamas or inactivity and that it has the potential to provide multi-fold return in long-term. They reduce rajas by not constantly churning their portfolio or taking risks in the short term. They rely on stocks with strong fundamental story and don’t get bothered with short-term volatility. They don’t overly on any particular asset class and build a diversified portfolio striking balance and harmony.
We have the unique ability to consciously alter the levels of the gunas in our bodies and minds. As Satvik guna is most desirable in investing, you can consciously increase it by applying simple yet powerful principles of Yogic Investing to create wealth.
(The author is the managing director and CEO of Axis Securities)