As the world of finance and money is infused with mindfulness, there is a logical question as to how this approach affects investment processes. Mindful Finance Investing is not the same as traditional investing.
It is also not the same as Environmental, Social, Governance (“ESG”) or Impact investing. However, Mindful Finance investing can be used to create and enhance both traditional and ESG/Impact portfolios.
There are three main tenets that define Mindful Finance Investing: Values Alignment, Authentic Relationships, and Recognition of Interdependence. The umbrella under which all of these tenets fall is: bringing humanity into the investment process so that people feel fulfilled and empowered, thereby creating a better world. Incorporating these tenets into investing can be accomplished for any type of investor.
Another way to talk about mindfulness training is to say “getting to know oneself”. By paying attention to the present moment we get to know ourselves – our fears, our dreams, our gifts, how we change, what stays the same, etc. In this context, we become better able to know how we feel about things.
Mindful Finance Investing seeks to incorporate this self-knowledge into the investment process. The view here is that, in an ideal portfolio, people would be invested in a way that is fully in alignment with their values. Whatever those values may be. In this way, a person’s investments become a reflection of their personal vision for the world. Each investor’s portfolio becomes aligned with what they feel is worthy of support.
Mindful Finance Investing respects and incorporates all the different types of views that people can hold. Finding and enunciating these views is facilitated by mindfulness. Non-judgmental awareness of personal experience allows for the clarity needed to discover and express values.
An aspect of mindfulness is an awareness of our experiences. As we gain familiarity with our own experiences, as a human being, we recognize that others share many of these experiences. From that simple, logical connection, compassion and the natural desire to connect with other people arises. From the Mindful Finance perspective, fulfilling the innate, human need for connectivity with other humans is an investment goal and advantage.
Often the investment process and ongoing experience is detached from genuine human interaction. Numbers and lines on paper or screens can be particularly disembodied. Just as analysis of information is a good practice in investing, it is also good for your investments if you have a relationship with the people that affect your investments. These connections can be with advisors, portfolio managers, marketers, company executives, or any of the many other people involved.
The benefits from this can be both return enhancing, and personally fulfilling. Both of these results are empowering. The return gains can be achieved in myriad, unpredictable ways which arise from actually having direct contact with people. Simply stated, it can be extremely beneficial to know people. The personal gains come from experiencing investing as an aspect of your life that meets your desire for good and beneficial relations with others.
Recognition of Interdependence
The final tenet of Mindful Finance Investing has to do with the goal of creating a better world; and with complexity, suffering, and compassion. The aforementioned traits of mindfulness: knowing oneself and recognizing shared experiences, are at play here.
In this instance, the complexity that is seen with mindfulness is perceiving the ways in which we are all participants in the society, culture, and economy in which we live. That fact coupled with the recognition that everyone has similar experiences and motivations leads to the realization that it is not productive or likely to be successful to solidify differences and attack other viewpoints from our own. Instead, it is more skillful to offer alternatives that address the needs and concerns of the humans involved.
By examining our own experience we see that a prominent aspect of our life is struggle, hardship, and challenge. We also see that everyone else also has these experiences – suffering. We would prefer not to have these experiences, and make efforts to minimize them. By extension, we also know that everyone else feels similarly. With this knowledge, two things become prominent: 1. The motivations that drive other people’s actions are very similar to those that drive our own actions, and 2. An effective way to cause change would be to offer solutions that minimize the suffering of ourselves and others.
Mindful Finance Investing incorporates these important points about human motivation by not labeling any investments, companies, or people as bad or disconnected from our own experience. Instead the view is that the economy is an ecosystem that influences all aspects of all of our lives, and which can only be changed for the better in a lasting and meaningful way by getting the human participants to go in the same direction. Demonizing others, emphasizing difference, and taking hardened, brittle viewpoints will not bear healthy fruit.
Mindful Finance Investing has the goal of bringing humanity into the investment process so that people feel fulfilled and empowered, thereby creating a better world. When you couple this view that there is progress to be made with the approach that pointing fingers and demonizing others is unconstructive, you get the Mindful Finance approach. This approach when applied to investing provides tenets to be explored and implemented, which gives rise to Mindful Finance Investing.
Sol is president of Highlander Financial. He has over 20 years of experience in financial markets and managing businesses.