India is a blessed land where gurus have preached the path of self-realisation and enlightenment for aeons. Lord Budhha, the revered founder of Buddhism, is one such name from ancient India who spent nearly 45 years spreading his teachings. These teachings are timeless and are as relevant today as they have ever been.

Interestingly, the lessons of living and life, are even relevant to investors. Beyond the world of financial jargon, technicalities, strategies and plans, there exists a world full of rich spiritual wisdom which can be applied to the investing world. In this article, we look at some of the Buddha’s words as guiding lights on investment matters.

On Discipline:

• “A jug fills drop by drop.” Small, regular and consistent investments go a long way in building wealth.
• “The trouble is, you think you have time.” The smart investors do not procrastinate and always act with a sense of urgency.
• “The person who masters himself through self-control and discipline is truly undefeatable.” Truly, a dedicated person with control on his spendings and discipline to follow his investment plans can overcome any financial challenges.
• “If you are facing in the right direction, all you need to do is keep on walking.” Having the right financial plan or investment strategy is the most important, all that remains after that is following it diligently.

On Behaviour:

• “Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.” Any financial decision has to be based on your present scenario, not past event or future predictions.
• “The root of suffering is attachment.” The biggest of the losses to investors come from their own biases and opinions, leading to irrational decisions, based on emotions.
• “Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense.” The investor should always follow his own plans and not be affected by market noise, herd behaviour, avoid FOMO (fear of missing out) or what others say unless there is sound reasoning for the same.
• “What lies behind us and what lies before us are tiny matters compared to what lies within us.” Clearly, our potential to build our financial well-being is much more than probably what we have achieved or what we think we can achieve.

On Action:

• “Work out your own salvation. Do not depend on others.” Clearly, one has to avoid debt and be financially independent. One should strive for his own financial well-being and not expect others will take care of you, even your children, especially in old age.
• “An idea that is developed and put into action is more important than an idea that exists only as an idea.” No virtual plans or strategies or dreams hold any value till the time action is initiated for the same. Working towards your plans and having timely execution is the key.
• “What you think, you become. What you feel, you attract. What you imagine, you create.” Before actions, come thoughts, ideas and imagination. Having the right kind of thinking and the right set of people you interact with will also impact your actions and ultimately your success.

On Success:

• “There are no secrets to success. It is the result of preparation, hard work and learning from failure.” The quality of your plans, your knowledge, your learnings from your past experiences and actions that you take would help determine your success.
• “It is better to travel well than to arrive.” The financial well-being is not a destination but a journey to be enjoyed. Even if one achieves a targetted amount of wealth, that is not the end of it as one has to manage the same.
• “To conquer oneself is a greater task than conquering others.” There is no standard for success and one can only be seen as a success or failure according to his own expectations. We should all aim for our own personal level of success and happiness rather than compare the targets which others have set for themselves.
• “Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship.” Any amount of absolute wealth may not add anything to your happiness. One who lives within his means and is content is wealthy. True happiness can come when you are healthy and you share your life’s journey with people whom you trust.

Final words:

The title Budhha, meaning ‘Awakened One’ or the ‘Enlightened One’, was bestowed on Gautama as he taught from his insights into ‘dukhha’ (suffering) and the end of same, by achieving a state of ‘nirvana’. Buddha, in turn, is derived from the words “buddhi” which literally means ‘intellect’, ‘intelligence’ or ‘wisdom’. It would be wise as investors if we also learn from this wisdom and apply them to in our lives as we walk the small path of our own financial independence or nirvana.

Sometimes it is good to have some mental laws framed in our minds. These laws when practiced in our lives has the power to influence our life and make it better. Strong personalities always abide by some rules/laws of their own. Living life without personal laws does not sound exciting and it indicates that you do not have a strong character, dreams or strong beliefs. Here are a few laws which you can think of adopting in your own lives:

[1] Law of Failure: By failing to plan, you plan to fail. Having no plans or goals in life means having a life devoid of achievements and successes.Plans can be made for every aspect in your life, be it studies, career, relationships, life events/goals or financial well being – no matter how big or small they are. Make it a law to plan for everything in life from life goals/events to monthly budgets.

[2] Law of Belief: Whatever you believe, becomes your reality. Your actions, feelings and intuitions will be guided by your beliefs. It is said that mountains can be moved if you truly believe and there was a man who actually did that. Make it a law to believe in yourself and the things which you dream of today, will be yours sometime in the future.

[3] Law of Sowing & Reaping: As you sow, so shall you reap. This is true for relationships, businesses and even investments. The quality of your life, relationships or financial well-being at any given moment, is a result of what you have done in the past. Make it a law to sow only good deeds and make only good decisions in life for a better future.

[4] Law of Accumulation: Every single thing you do, positive or negative, accumulates. Everything that you do, you tend to repeat, and things that are repeated over time will become your habits, and it is habits that influence and shape your life. Make a law to do and accumulate good actions and avoid the bad ones.

[5] Law of Attraction: You will always get attracted to people and circumstances that are in harmony with your dominant thoughts, whether positive or negative. Whatever you think about, you imbibe into your life. Make it a law to think about only positive aspects, people and outcomes in your life.

[6] Law of Cause & Effect: Everything that happens in life has a cause behind it. Every success or failure is the Effect of a cause. Success & failures do not happen by accident. Make it a law to set good causes/action into motion.

[7] Law of Creativity: You are limited only by your imagination. All positive changes and progress in your life begins with new ideas. The supply of ideas and innovation guides your potential. Once you have unlimited -ow of ideas, your potential too becomes unlimited. A big part of your happiness, success, relationships and future depends on the quality and quantity of the ideas that you have. Make it a law to generate quality ideas.

[8] Law of Control: You feel positive about yourself to the extent you feel you are in control of your own life. If you do not hold the strings of your life, you tend to become weak. Make it a law to get your entire life in your control.

[9] Law of Emotion: Every human decision is likely to be based on an emotion. Stronger emotions tend to dominate the weaker ones, which in turn will determine your decisions and actions, more than rationale. Make it a law to keep your emotions in check and not let any particular emotion dominate while taking a decision.

[10] Law of Luck: The more you work hard, the more lucky you become. There is no pure luck or chance worth waiting for in life. Once we are focused, committed and work hard, luck shines upon us. Make it a law to do more hard work to be lucky.

[11] Law of Destiny: When you truly work towards achieving something, the whole world conspires to help you get it. If you are dedicated to a single cause so much so as to make it your only passion, your life, then there is nothing in this world, that can stop you. You will find that slowly everything will start falling in place. Make it a law to have your own future and destiny decided to act whole-heartedly towards it.

[12] Law of Memory: If you do not repeat soon what you have learnt you will easily forget. But if you practice, do what you have learnt, you will remember it for long. This is true for any knowledge or skill that you learn in life. Make it a law to repeat and to practice what you have learnt.

[13] Law of Use: Whatever talent, ability, or gift you possess becomes stronger and better with exercise. If you don't use it, you lose it. This is the reason why most gifts and skills which we had as children tend to disappear with time. Make it a law to use your gifts and skills often and to not lose them with time.

[14] Law of Reaction: For an action, there would be a reaction. Every action of yours, be it good/positive or bad/negative will tend to have a similar reaction. Even if the reaction is not visible, there will be an impression made which will be hard to erase in life. Make it a law to take actions which brighten your's and others' lives.

[15] Law of Time: Each one of us has the same number of minutes and hours. But the actions and work done varies from person to person. The idea is to manage time and work effectively, in a way that there is little spare or idle time left. This will make sure the time needed to do a particular task keeps reducing, while the number of tasks done keeps increasing.

[16] Law of Company: You become the company you keep. You tend to think, act, behave and even dream similar to your company. Having an intelligent, aspirational and motivating company will inspire you to grow yourself into a better person. Make it a law to have a company of people similar to what you aspire to become.

[17] Law of Compensation: You are always compensated in more than equal measure for what you do. The more you give, the more you get. As long as you are doing good for other people, others will do good for you.

[18] Law of Expectations: What you expect is what you get. You do not get what you want or desire but what you expect. Expectations though have to be grounded on reality. If your expectations are just and well placed, you will get what you deserve and you will not be disappointed. Make it a law to have realistic expectations in life.

[19] Law of Karma: Keep doing good deeds without expecting fruits. Your hard work and good deeds will eventually pay o and you will enjoy the true fruits of labour. However, doing something while keeping results in mind might obstruct your vision. Make it is a law to do good without worrying about fruits.

[20] Law of Forgiveness: Bad experiences, pains, grievances and complaints are only burdens that you tend to carry unknowingly. You are mentally healthy to the degree to which you can forgive and forget. Your willingness to forgive others and to let go of the past grievances is the single most important determinant of whether or not you are free of burdens to act optimally with utmost freedom. Make it a law to not carry any burdens in life.

[21] Law of Habit: Your actions repeated over time become your habits and your habits in turn de fine your character. Your character ultimately shapes your destiny. In the absence of a specifi c decision on your part to change an aspect of your life, the natural tendency will be to go on the same way inde finitely. Make it a law to make good habits in life to transform your life over time.

[22] Law of Subconscious Mind: The subconscious mind is a powerful tool and when used properly can do wonders. It goes to work immediately on whatever you plant in your mind to bring it into reality. The subconscious mind makes all words and actions t in a pattern consistent with your self-concept and your dominant goals in life. Whether positive or negative, good or bad, if you hold an image continuously, make it emotional, and visualize it in your conscious mind, it will begin to organize everything around you to make it come true. Make it a law to create and shape yourself in your subconscious mind.

The title of the article may sound like a chapter from a psychology book. But hardly is it academic in nature. This time around, we would take a look at what goes on in our minds before we take any investment decision.Investment decision making is like a coin with two sides – one which is about about facts, figures, objectivity, planning & so on. This is the heads side of coin. The other side is about how we are, our emotions and our behavior. For most of us, our coins don't often land up as heads. Let us then see at ourselves and look at these behavioral patterns more closely.

Personal Business:
Everyone has a favorite. And the good thing about having favorites is that you tend to know more about them. In investments too we have our favorites and that it where we would be mostly investing. For some it may be equity, for some bank fixed deposits and for some, insurance plans. But the problem really starts when we tend to ignore other better options while feeling comfortable with our choice. Statistics show that a majority of the investors tend to invest only in one, two or at most three products for a particular purpose. Also we tend to be skeptical about new investments and unconsciously find reasons to reject the new ideas. As investors we should always be open for new ideas and investment avenues but not necessarily adventurous.

Herd Behavior:
Another behavior commonly observed is herd mentality. We often tend to follow others believing that what everyone is doing is right and thus going with them wouldn't harm us. This approach reaches an extreme when we know that something is not right but we still go through it believing that everybody is doing it so when something goes bad, you will not be alone. The sense of our loss becomes less hurting when we know that others have lost too. We also don't want to stand out in a crowd and do things which most of our friends, family members have not done or are not comfortable with. While making investment decisions, this approach or behavior is something we must avoid. If everyone is saying that 'x' is bad or 'y' is good, it needn't be so. Evaluate your decisions independent of what others are doing or saying.

Impatience:
With changing times and growing use of technology and other services, we are now spending less time for things that used to take hours before. The fast paced life has also made us more result oriented and impatient in many things, investments being one of them. However, within investments too, we tend to be more impatient and demanding out of few investment avenues, like equities, while being very easy with others, like say fixed deposits. Playing a good dad or bad dad to different investment avenues is not good. Often impatience leads us to make compulsive decisions, which may not be beneficial. Every asset class is suited for a particular time horizon and equities are for long term. So let us avoid checking our investment every now and think what the remaining money can do for us.

Pleasing others and self:
There are also a few among us who are good samaritans. Being good means that you take decisions knowing it may not be best suited to you, just to please or benefit that other person. It is not easy for you to say no. There may be may motives behind this like say relationship, financial assistance, ego or simply charity. But does acting on recommendations by persons, to whom you can't say no, make any real difference to anyone? In doing so, many a times, we also unconsciously are trying to please ourselves and feel good about making such investments. We must learn to say no to investments until we are not very sure about, irrespective of who is behind it.

Not asking questions:
There are also few among us who are not in the habit of asking questions. When any investment idea is proposed, we often just ask a few customary questions often beginning with “How is it?” Reasonably satisfied with replies, we rely on the trust and relationship of our adviser who is helping us. Surely, your adviser is acting in your interest, but wouldn't it be really a lot more worthwhile if we could ask all relevant questions before making investments? This would include questions on ideal time horizon, expected returns, risks involved, tax incidences, liquidity, operational matters, past performance, other comparative products, investment costs and so on. Make use of these questions and the next time your adviser will surely bring better options before you and also come well prepared. So next time any investment idea is thrown at you be ready to say “Tell me everything about it”.

Procrastination & laziness:
Another very common behaviour observed is that of procrastination. This impacts our financial decisions fairly regularly. Procrastination can be seen in every instance of delaying investment decisions, delaying paper work or pushing decisons to some other time. Our laziness too gets the better out of us. Often, it is because of laziness that we do avoid getting involved in proper research, study of our own needs, financial goals, investment options available and so on. Combine them and we get a deadly combination that can kill good opportunities and harm our financial well-being over time. You may not see any big impact at any point of time, but they are always there, eating away your few rupees every now and then.

Overriding emotions:
The last behavior but also the most pressing one is where we let our emotions get the better of us and impact our investment decisions. There are three emotions that we will talk about here – greed, fear & hope. Greed would be like buying when the prices have risen, looking at the past performance or the returns others have made or still holding on for more when the prices have already risen. Greed would also make us go on fishing trying to catch a big fish from a water we cannot see. The big fish or the next multi-bagger, hot tip, often does not turn up. At the end of the day, we waste more of our precious time and money trying to get one than from we benefited, even if we caught one. Fear is another big emotion to be beware of. It often makes us avoid good opportunities when markets are not doing good, for the fear of further falls. A sense of negativity prevails and we tend to believe worst is yet to come. We would also tend to sell and windup our investments in order to salvage whatever we can at preciously the time we should be acting in the opposite manner. Not only do we end up loosing money but we also end up loosing money that we could have made during these times. Any bad experience in past also makes us overly cautious and we blacklist the entire investment class for ever, often to our own loss. Hope is last of the big emotions that we pay to carry. Often it would make us keep holding in our long time, favorite investments hoping they will recover to the past highs. A sensible, objective analysis should be made each time any emotion overbears itself on our thinking. Emotions, after all, carry no value in the investment world.

Knowing and acknowledging the presence of these behavioral traits within ourselves would help us in avoiding decisions taken immaturely. The better we know ourselves, the better we can be objective in our decision making. Consciously keeping our emotions aside over time will see that our investment coins lands heads up more often than not. It is this process by which you graduate from a normal investor to a smart & shrewd investor.

We live in a dynamic, evolving, uncertain world. The investment landscape is too constantly changing with uncertainty being omnipresent. The wisdom to know what to do and how to act in the face of this uncertainty will decide who and what will succeed or fail. This is the reason we must time and again go back to the fundamentals of investing, especially equity investing.

Presented here as commandments, these are the ground rules and behaviour which suggest specific actions to pursue or avoid. The 10 commandments distil the collective wisdom of investment gurus and are timeless in their relevance and importance, and we need to remember it from time to time. In an uncertain investing world, the below ten commandments can help you navigate and find success as investors.

1. Thou Shall Avoid Emotional Investing

   “If you can’t control your emotions, you can’t control your money.” - Warren Buffett. This is the most important commandment and hence the first on the list. Without separating emotions from investing, none of the below commandments will be of much use. Equity markets, as many now would agree, often experience stages of fear and greed, as recently witnessed in the past few months, again. Anyone falling prey to the herd mentality is bound to make mistakes. We should refrain from the FOMO (fear of missing out) emotion and take a step back, think independently and rationally, always.

2. Thou Shall Not Forget Asset Allocation

   Smart investors always have an eye on their Asset Allocation. The next commandment requires one to have an asset allocation strategy to manage one’s overall investment portfolio. Within asset allocation, one has the option to choose fixed or a dynamic asset allocation approach, depending on your risk appetite. This can be revisited every few years or after any major life event. A regular rebalancing to restore your asset allocation, either on a fixed frequency and/or driven by sharp market movements, is all one needs to do on an ongoing basis.

3. Thou Shall Always Diversify

   Beyond asset allocation, diversification ensures that you do not concentrate your holdings and risk into limited funds or securities. Equity diversification can be across different market capitalisations (large/mid/small/mixed), fund styles (growth/value), even countries (domestic/international), etc. As compared to direct equity investing, mutual funds offer much better diversification as a single fund will invest in many stocks at any point in time.

4. Thou Shall Not Ignore your Risk Profile

   A risk profile is an assessment of an individual's willingness and ability to take risks. It is important for determining a proper investment asset allocation for a portfolio. We can think of risk as the trade-off between risk and return, which in other words is the trade-off between earning higher returns at higher probability /risk of losing capital or earning lower returns at a lower probability /risk of losing capital. We should see the risk profile as the weighing machine to avoid financial and emotional damage beyond what you can handle.

5. Thou Shall Always Have A Plan

   By failing to plan, one is planning to fail. To accomplish anything worthy in life, preparation /planning is required, even for financial well-being. Irrespective of how big or small your savings or your goals are, planning is critical to reaching your destination. A good plan identifies where you are today, where you want to go and more importantly, how to reach there. If one put it in a sequence, there are first dreams, then goals, plans, execution, course correction and finally achievement.

6. Thou Shall Follow Discipline

   Being disciplined at handling and saving money is a lifelong behavioural change. Small things, repeated many times over, over many years, can result in wonders. Being disciplined for an equity investor would mean being steady, sticking to and following your plan and not reacting to the market craziness. Often disciplined savings in equity is also promoted rather than putting all your money at the same time in the markets. Disciplined savings with Systematic Investment Plans or SIPs in equity mutual funds is a very popular approach to disciplined savings in equities, which is hard to replicate in direct equities.

7. Thou Shall Not Predict Markets

   If there is one ability which all equity investors and managers dream of, it is the ability to predict markets. Unfortunately, no one is gifted with this foresight. What is amusing is, it is easier to predict over many years rather than to predict the next day! Successful investors are not better market predictors but are more researched, they hold on to their convictions, use common sense and invest for long-term, where the probability to succeed is high.

8. Thou Shall Not Leverage

   Leveraging is the easiest and the fastest way to bankruptcy. Period. The only people who may leverage are the ‘traders’ running the business of short-term trading in stocks /indices. Derivatives, comprising  futures and options, again are called as the weapons of mass destruction and is a territory of only those who wish to take it up as a full-time business, willing to sacrifice mental peace to take up daily risks. Retail investors should clearly stay out of this world which can take away a lifetime’s savings without a day’s notice.

9. Thou Shall Not Run After Tips

   What happens when you mix equity investments with excitement? It becomes gambling. Surely, you can hunt stock market tips, buy penny stocks, bet on horse races, buy lottery tickets, all at the same affordable prices. But please do not paint all this as part of your equity investments. Buying established companies or good funds is far more predictable than buying into the unknown, fly by night, companies available at prices cheaper than chocolates or public bus tickets.

10. Thou Shall Not Make Big Mistakes

    Sometimes, all it takes is one mistake to ruin the good work done over many years. Such mistakes need not be limited to equity investing but can be in any sphere of life which can destroy your wealth. Investing in unsolicited, get-rich-quick schemes, bad property deals, business failure, unemployment, legal disputes, marital break-down, etc are many of life’s realities which not only take our mental peace but can also cost us dearly. Lack of adequate insurance for death, disease, disability and damages to property, business establishment /goods etc by far are the most common reasons behind ruining a family’s financial well-being. Ensuring safeguard against risks, being careful in decision making, creating multiple earning sources and smartly compartmentalising your investments is needed.