This blog originally posted on March 6, 2018 by PETA.
To the untrained eye, financial markets can appear to be a domain in which compassion has no place and only the most ruthless thrive. Headlines and dollar signs mix to create a fast-moving environment that can seem daunting to navigate. Investors constantly struggle to determine the best next move. Yet at second glance, one can recognize the parallel between stock markets and the broader world—and the benefit of approaching everything with a cruelty-free mindset.
The reality is that financial markets are a microcosm of human behavior—a grand stage where our emotions rule and bad habits wreak havoc. Markets are dominated by feelings—there’s far less logic to the trajectory of a stock, success of an investment, or direction of an economy than we tend to assume. With a little perspective, we can notice the presence of emotion in every single investor and investment decision. Whether an innate cognitive bias or even someone’s mood on a particular day, decisions influenced by feelings are ubiquitous in markets—and this deprives us of any form of actual control.
Akin to controlling the thoughts and emotions of other people, trying to predict or outmaneuver markets just isn’t possible. Despite our deepest desires and greatest efforts, we’re altogether powerless to control the emotional financial markets. So the wise investor turns inward, recognizing that power resides solely in understanding ourselves better. As in other aspects of the larger world, the only thing in finance that we can actually control is our own behavior. While we can’t influence whether a stock goes up or a market crashes, we certainly can control our reactions. If we think about it deeply, we’ll realize that our own behavior is really all that matters and therefore that self-awareness is the pathway to better performance.
Interestingly, this most advantageous of skills is one that vegans cultivate daily. Following a cruelty-free lifestyle necessitates self-awareness. We can’t reduce our negative impact on all sentient beings without an acute consciousness of the consequences of our actions. Whether it’s the food we eat, the clothing we wear, or the shops we patronize, in order to do no harm, vegans practice self-awareness at every step. And this mindfulness is an essential practice in the financial world, too.
Buying low and selling high are foundational principles of investing but counterintuitive, and adhering to them requires a tremendous sense of purpose and commitment. Implementing a plan of diversification is imperative, but it’s difficult amidst the allure of profit—again, this requires remarkable self-control. Staying the course is critical, but it’s terribly challenging when faced with a market correction. Once again, this means being highly self-aware. Behaving logically in an environment fraught with emotion requires the very skill that vegans apply in every moment of their lives. And that’s not to say that all vegans are fully self-aware or that this is a trait possessed only by vegans. But the ability to be mindful of our own behavior is essential to maintaining a vegan lifestyle and priceless in the profit-driven world of finance.
This might be a radical idea to typical investors who instead favor the familiarity of their habits and heed the call of their emotions. But it wasn’t that long ago that being vegan was considered radical. Yet through a deep desire to live cruelty-free, vegans focused on their own behavior in order to create change in themselves and the broader world. The same could easily happen in finance. By focusing on our own behavior in markets, we can transform our approach and, eventually, the world. We can improve the performance of our investments just as we improve the lives of all living, feeling beings—simply by being more self-aware.