Can mindfulness help in money management?

Meditation, a technique typically ascribed to the spiritual, may be useful for investors who need to think better

While investing decisions depend to a large degree on due diligence, market intelligence, and expert advice, it is ultimately an act of faith for most investors. Markets can behave unpredictably, as this past year has shown, and the likelihood of making ill-advised trades increases during these times of panic. So it is probably not so surprising that meditation – or mindfulness, as it’s also known – is being recommended to financial professionals, according to the Globe and Mail.

“[T]hink of [meditation] as a hardware upgrade,” said Jason Voss, a former portfolio manager who recently held a meditation workshop sponsored by the Toronto branch of the CFA Institute. Citing different business icons who applied the technique – including Paul Tudor Jones, Ray Dalio, and Steve Jobs – he stressed that meditation does not have to involve any particular set of religious beliefs.

“Many of us already slip into meditative states every day,” he said, explaining that it usually happens during the performance of simple, focused tasks, and regular practice can make it easier to achieve. According to Voss, people who practice meditation can create a pause between stimulus and response, which prevents knee-jerk reactions induced by immediate fear. Steve Jobs also said that meditation can slow down the brain’s usual chatter, which can improve perception and intuition.

From an academic standpoint, evidence supporting the technique is still limited. Conducting a review of 19,000 studies on meditation, researchers at Johns Hopkins University found only 47 that met their standards. And while those studies found that meditation could help reduce depression, anxiety, and pain, the researchers found no evidence that it is better than other behavioral therapies, exercise, or medication.

Speaking from experience, Voss said that meditation allowed him to work more efficiently during his days co-managing the Davis Appreciation & Income Fund, which outperformed the S&P 500 at the time. According to him, he was able to see trends and connections in just a few hours every day – a vast improvement over the 100-hour workweeks he originally had to do.

So for investors and professionals who want to negotiate the potentially turbulent waters of the financial markets, it may be worthwhile to learn more serene ways to keep their mind on their money.

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