On the auspicious occasion of Dussehra, many of us are starting new ventures, making new investments, buying new vehicles or bringing home some gold. While the festival is considered auspicious for all the things mentioned above, it also teaches us some crucial money lessons which are as follows:
Victory of right over wrong: The festival is the symbol of victory of good over evil. In the parlance of finance, investing money in stable stocks and indices can be equated with being ‘right’.
In order to earn quick money, some investors are tempted to invest in the stocks of poorly managed companies or extremely volatile financial instruments such as NFTs.
So, we can draw a lessons that it is advisable to choose stability over quick returns.
Strategy and planning: The victory of Lord Rama over Ravana could be possible because of the right strategy and planning. A haphazard made plan usually falters unlike the one efficiently executed by the King of Ayodhya.
Likewise, in the world of investments, it is vital to make a proper strategy before starting to invest and curating a well-rounded portfolio.
End of arrogance: The defeat of powerful Ravana, among other reasons, is often attributed to his arrogance. So is the case with money management.
An investor is supposed to be knowledgeable but humble at the same time. When their judgement is clouded by arrogance, they are likely to take wrong decisions and lose money.
Persistence and patience are virtues: Winning over Lanka required a long-drawn planning and patience by Lord Rama and his acolytes. The battle took a long time before it could be won. Likewise, in case of money management, it is the game of patience and persistence.
Very famously, Warren Buffett once said that creating wealth takes time.
The right mix: The army that won the battle against Lanka had scores of monkeys led by Lord Hanuman. Their army comprised Lord Rama and his younger brother Lakshman, among others.
It required the efforts of a number of people to enable Lord Rama to cross the bridge from India to Lanka.
The team spirit that made this victory possible is akin to diversification that makes a portfolio strong. A good portfolio entails stocks across market caps, bonds and cash so that the loss in one can be recouped by the gain in another.
What looks small may not be small: Lord Rama walked on foot, stayed in a forest with his brother and wife, did not have an army to fight against Ravana who — on the other hand — was ruling over Lanka that was then known for its ostentatious display of wealth.
Lanka was reportedly made of gold; Ravana possessed extraordinary powers and despite all this, he lost.
Likewise, stocks and investments that inspire confidence may not necessarily be good in the long run. On the contrary, the stocks that are trading low and have not given delivered good performance in the recent past may turn out to be outliers.
After all, investing is all about being ready for uncertainty-riddled future.
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Updated: 24 Oct 2023, 12:19 PM IST