| Markets rise and fall with the unpredictability of ocean tides. Prices surge, driven by emotion, speculation, and external forces, only to correct when reality reasserts itself. It’s looking like the new president, with his outspoken nature, may worsen the volatility in the market for the short-term. While it’s difficult to leave your emotions at the door, the most successful investors embrace a mindset similar to that of a Buddhist: non-attachment to both gains and losses. The Buddhist investor is swayed neither by elation in bull markets nor despair in bear markets. Instead, focus remains on principles, discipline, and a long-term vision. The perils of emotional attachment: Lessons from behavioral finance Emotion is the greatest adversary of rational decision-making. Much has been written about behavioral finance and its influence on investors. When investors become attached to success or failure, they expose themselves to the destructive forces of greed and fear (which are the two most dangerous emotions in investing): Rising markets are seductive. Each uptick in price seems to validate one’s skill and wisdom, inflating confidence and encouraging euphoria. Many investors become euphoric, believing gains are limitless, which leads them to ignore risk and fundamental value. “This time is different” they think. When markets turn against them, those same investors fall prey to fear and panic. The attachment to their prior gains clouds their judgment, leading to rash decisions that lock in losses and miss future recoveries. “This time is different” they think. These reactions create a cycle of buying high in moments of excitement and selling low when panic sets in. Neither is conducive to long-term wealth accumulation. A thought experiment Take a hypothetical scenario. You invest $100,000 each into two different funds on January 1st. Fund A grows steadily, and a year later is worth $110,000. You’re happy with your 10% return and stay the course. Fund B rockets from $100,000 to $500,000 in February. Then the fund falls in value all the way down to $110,000 at the end of the year. You’re furious with the loss and pull your investment. Mathematically speaking, both investments provided identical 1-year returns. Fund B, however, was an emotional roller coaster. The wisdom of non-attachment Profits and losses are inevitable, but they do not define success. Like the impermanent nature of all things, market returns are transient. The wise investor does not celebrate excessively when a portfolio grows, nor mourn when it declines. Instead, they remain focused on the process - on sound research, proper diversification, and disciplined rebalancing. Success, in this framework, is measured not by short-term results but by the consistency of good decisions and discipline over time. Acceptance of uncertainty Markets are inherently uncertain. Attempting to predict every turn or control every outcome is an exercise in futility. The Buddhist investor accepts that uncertainty is the only constant and embraces strategies that work within this reality rather than resist it. A diversified, balanced portfolio reflects this mindset - it acknowledges that the future is unknowable and positions for multiple possibilities. The “risk premium” (the technical term for uncertainty in capital markets) is the fundamental reason for future returns after all. Letting go of ego Attachment to ego can also be ruinous in investing. The desire to be “right” often leads to doubling down on bad bets or refusing to sell losing positions due to pride. By recognizing the limits of one’s knowledge and surrendering the need to always be correct, an investor can remain adaptable, cut losses when necessary, and learn from mistakes. Humility, a core Buddhist virtue, is equally critical to successful investing. Practical tips How can an investor cultivate a mindset of non-attachment while navigating the ups and downs of the market? Measure success by the soundness of your investment process. Did you follow your strategy? If so, the outcome is secondary, and more influenced by randomness than you would think. Investing requires patience. Avoid checking portfolio values constantly, which fuels emotional reactions. Instead, schedule regular, deliberate reviews to maintain perspective. A good investor understands that a winning trade does not make them a genius, and a losing trade does not make them a failure. Wins and losses are both necessary parts of the game and being attached to either is not a constructive influence on your investment process. To thrive in the unpredictable world of investing, adopt the qualities of a Buddhist: detachment, humility, and acceptance of impermanence. Remember, markets do not reward attachment to outcomes but disciplined adherence to sound principles. By focusing on process, letting go of ego, and accepting the cyclical nature of success and failure, you can become a master of your emotions - and by extension a master of investing. | 
