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23 Oct 2020 by Pradeep U
The One Superpower You Need to Invest in Equities Successfully! - Research & Ranking

Ever since the word 'success' got introduced into my dictionary, I was always eager to know what makes a person successful. Whoever I asked this question or whenever I read about success, most of the times the answers were either 'patience', 'resilience', determination 'and 'vision'. And, since a very long time, I believed these were the only ingredients to being successful. And when I entered the stock market world, 12 years back, I still believed back then that these were the only superior qualities that made any investor successful.

But then, when I started talking to more and more investors, I saw that many were determined, many were patient, and many were resilient. By default, if an investor is doing tremendous research to identify the stocks or best investments for him, he would have some amount of dedication and resilience at least to take this step. That bare minimum credit needs to be given to him!

But does this guarantee success? Does this guarantee less stress while investing in equities? Or say more peace after investing in equities?

Recently, during a lockdown, I got a chance to read a wonderful book on 'The Little Book Of Mindfulness' by Patrizia Collard.

In his book, the author beautifully captures the most essential secret to taking less stress, leaving a more peaceful life and being successful.

In his book, there is a fascinating story of Buddha. Please allow me to narrate it to you.

So once someone asked Buddha, "Sir, what do you and your monks practice?"

Buddha: "We sit, we walk, and we eat."

Man: "But sir, everyone sits, walks, and eats."

Buddha: "When we sit, we know we are sitting. When we walk, we know we are walking. When we eat, we know we are eating."


Buddha followed this practice. But what does it mean?

Buddha was referring to practising 'Mindfulness' and applying mindfulness to daily life situations.

But what is mindfulness - In simple words, a way of living in the present and being completely aware of the present.

Many people are not aware about what they feel. Their mind is occupied with worries, fears, insecurities, regrets and they may not be even aware/mindful of that. This happens when you are too caught up with the past or the future, ignoring the most important i.e. present. The opposite of this is mindfulness.

This practice rests on three pillars:

    • Remembering to stay alert/be completely conscious of what we're doing in the present moment.
    • Being cognizant of the thoughts that arise in mind; and
    • Remembering to avoid the negative/unskilful thoughts that distract us and developing the positive/skilful ideas or thoughts that promote more peace.

Practicing Mindfulness

The human today faces the technological, political, social and even spiritual conundrums. This rapid change in itself may bring a lot of quandaries and stress. Thinking about this rapid change can petrify anyone. And that's where the practice of 'Dhyaan' or 'Meditation' comes into the picture. You may ask me how.

When you practice meditation, it is when you discover the inner state of your mind, which will help you become more conscious of what you do and ultimately handle this change in an effective way.

And when we have choices to make, especially the tough ones, you will need this superpower to make choices while being aware of the present moment.

Take any successful person, one common trait across them is, staying balanced and staying aware as they go through the ups and downs of life.

Mindfulness while investing in equities

Coming to the question that you may have, how is this relevant while investing in the stock market?

My answer is - It is not any different!

As a person and as an investor, your real superpower is staying balanced as you go through the highs and lows in the journey. And I would say after a decent experience in the market; it is a real edge to remain balanced, keep aside pride, euphoric and ego while you grow, and keep aside fear and stress aside while you fall.

Mindfulness is all about the art of balance as you undergo various emotions of life. It is about sitting still, and observing each breath, being conscious of what you think and being aware of the present. If done in a very systematic manner, this technique allows you to calm your mind, concentrate, discover answers and experience joy and happiness. You need to do this activity with no kind of distraction or disturbance and with complete concentration.

While investing, you will come across many rapid changes - market sentiments, regulatory, political, macro-level developments, stock level, sector level, micro-level, and so on. The list is quite too exhaustive. Coping up with all these developments demand adopting a balanced approach throughout and being aware of the present moment.

As an investor, quite often, we don't notice how our biases and perception or our mental filers affect how we view this world and developments. That's where the role of Mindfulness comes into the picture.

Never forget the principle of impermanence. Meaning, neither the highs nor lows are permanent. 'This too shall pass', was the exact thing we were advising our clients when the markets crashed in March 2020.

Coming back to the most important question - how to practice it?

    • Start with a very simple breathe in and breathe out exercises. However, the challenging part of this activity is to recognize your breath. So start with a time easy to accomplish and then gradually increase it.
    • Become more aware of your thoughts. Our mind is different, and it is very easy to remain caught up with what happened in the past. You had a terrible day at work, and you go home. Your spouse is talking to you, but your mind is not there. You are still thinking about what happened at the meeting. This is not called mindfulness, as you are not in the present. So becoming more conscious of your thoughts can help you live more in the present. Even while investing, becoming more mindful of your goals (why you are investing in the first place), may help you to stay disciplined, take less stress and experience better results.
    • Avoid multitasking. I once read an article on Mental Energy Units. This story told that people are not tired with work, but with hopping from one task to another, which consumes a lot of mental energy units. Successful people have this uncanny ability to focus. This saves your time as well as mental energy, eventually making you feel more energetic. Similarly, when you own too many stocks (more than required), your mind gets exhausted tracking them. Remember - it is not the stock market volatility, but the number of stocks that you purchased without being mindful, which leaves you completely clueless about their future after some time.
    • Accept your thoughts - It is okay to feel fearful, worried, angry or low. But don't be in denial. Rather accept your feelings, be it good or bad so you can live in the present. Similarly, while making investment decisions, be mindful of your emotions. This will help you invest better.
    • Take care of yourself - I cannot be ending this story without saying how important it is to take care of your physical and mental health.

As we are just approx. 2.5 months away from entering 2021, let's take a step towards being more mindful of our investment choices and actions. This will make the true difference between 'surviving' and 'thriving' in whatever you do, be it investing in equities.

To learn more about mindfulness, you can follow these books:

The Little Book Of Mindfulness by Patrizia Collard

21 Lessons For The 21st Century by Yuval Noah Harari

The Mindful Day by Laurie J. Cameron

To read about best books on investing in equity click here.

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