On the occasion of Janmasthami, a festival celebrating Krishna’s birth, let us aim to capture some of them that will help you in managing your money the right way and addressing major milestones.
By Rahul Jain
One of the most revered characters of the epic Mahabharata is Lord Krishna. Incredibly tactful and highly enlightened, he played a decisive role in the battle of Kurukshetra, swinging the odds in favour of the Pandavas.
If observed closely, there are a lot of similarities between investments and the tactics deployed by Lord Krishna in the 18-days long battle. On the occasion of Janmasthami, a festival celebrating Krishna’s birth, let us aim to capture some of them that will help you in managing your money the right way and addressing major milestones.
1. Have goals
Throughout the battle, Krishna did not allow the Pandavas to lose sight of their goals, which was to conquer Adharma, represented by the Kauravas. Time and again, he kept reminding them not to lose focus of their objective of establishing Dharma by winning the war at all costs.
Similarly, it is essential to have a holistic picture of your financial goals and invest accordingly. A goal-based investment approach helps you choose the right instruments and ensures you have the required funds when needed.
For instance, if you intend to build a corpus for retirement, your portfolio needs equity exposure as they have the potential to deliver inflation-indexed returns in the long run. Also, you must remain invested for the long haul as equities are volatile in the short-term. Similarly, for building an emergency corpus, liquid fund is your best bet, which not only offers better returns than a bank savings account but also can be easily accessed, when needed.
2. Cut emotions out of investment
Before the start of the Kurukshetra battle, Arjuna was overwhelmed by emotions refusing to fight against his loved ones, which included his grandsire (Bhisma) and guru (Dronacharya). To help him overcome this, Krishna recited several verses, which later came to be known as the Bhagavad Gita.
If Krishna hadn’t helped his friend then, Arjuna would have probably not participated in the war, thus spelling a major setback for the Pandavas.
On similar grounds, to achieve personal financial freedom and address key goals, it is important to leave out emotions from investments. For example, during short-term volatility, it is essential to remain patient and not exit the market. On the contrary, it is equally vital to dodge the herd mentality and avoid bettering on risky instruments in the lure of high returns.
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3. Change strategy, if required
An infamous incident of the Kurukshetra war was when Yudhisthira, the eldest Pandava, spoke half-truth of Ashwathama’s death that led Dronacharya to give up his arms and subsequently led to his downfall.
It was Krishna who originally plotted this, as he knew the only way Drona could be conquered when he would be unarmed, possible only upon hearing the news of demise of his son Ashwathama. Though Krishna always advocated the path of truth, he changed his stance on this occasion.
Investments call for a similar approach. For instance, it makes little sense to remain invested in instruments offering assured returns that are hardly inflation-beating, when saving for a long-term goal such as children’s higher education. Also, when you are nearing a goal, it is prudent to shift your investments from equities to debt to prevent a dip in the accumulated corpus due to market swings.
4. Avoid undue risks as far as possible
While Arjuna and Karna were warriors of equal prowess, the latter possessed divine weapon of Lord Indra, which the former had no answer to. It was because of this that Krishna shielded Arjuna from Karna for quite some time. Only when Karna used this weapon on Ghatotkacha, Bhima’s son, which ensured complete safety of Arjuna, that Krishna brought him face-to-face with his biggest nemesis.
Investment strategies are no different. It is important to avoid undue risks and expose your portfolio to volatility. For example, while small caps have the potential to deliver superior returns as against large or mid-caps, they are riskier.
You should invest in them only if you have the stomach to bear losses. Else, it is in your best interest to avoid them. Also, when you are set to accomplish a goal, capital protection rather than appreciation should be the aim.
To sum up
As evident, the plans deployed by Krishna in the epic battle hold crucial lessons pertaining to investment. Following them can help you be in command of your finances and make sure you address each life goal with impunity. At the same time, it enables you to build a legacy for the future.
(The author is Head, Personal Wealth Advisory, Edelweiss)