Tenzin Gyatso, also known as the 14th Dalai Lama, is the former leader of the Tibetan state, the current spiritual head of Tibetan Buddhism, a Nobel Prize winner, and apparently one of the happiest people in the world. As a Buddhist monk, he officially has no money of his own, and although he is not a capitalist, some influential investors have used Buddhist teachings like his to improve not only their spiritual lives but also their investments.

You might be skeptical of the idea that Buddhism and investing go together. After all, when you think of capital markets, you may envision flashing red and green lights on CNBC or the greed and hubris depicted in movies about Wall Street; this hardly seems like the quiet domain of a contemplative monk seeking unity with all living things. Yet if you move away from the dramatized version of investing presented in Hollywood and on cable television, you can see that many of the Dalai Lama’s teachings, such as humility, calm, and discipline, can serve you well in a real-world investment context.

“Determination, courage, self-confidence lead to success, but we should always remain humble, modest, and unpretentious.” – Dalai Lama

Self-confidence is usually abundant on Wall Street, but where does humility come in? It’s definitely not an attribute often associated with successful investors; after all, if they were humble, you might not even know they were so successful. However, as many individuals have learned over the past few years, trying to predict significant events such as pandemics, wars, inflation, and recession, as well as the timing and scope of the market’s reaction to those events, is an act of pure folly. A bit of humility, on the other hand, will guide you away from such mistakes by allowing you to accept that you cannot outguess short-term market fluctuations and that you stand a far better chance of success if you ride along with the flow of the market rather than try to conquer it.

“Self-discipline is crucial to a simpler, more contented life.” – Dalai Lama

Humility will allow you to see the path to investment success, but you will need calm self-discipline to stay on that path. Stock markets frequently exhibit large price swings, to both the upside and the downside; it’s during these times that fear, greed, and the influence of friends and the media can tempt you to stray from your plan.

In keeping with the Dalai Lama’s teaching, cultivating discipline will help you meet these difficult situations with a calm mind and avoid the temptation to sell when markets are in panic mode or to go “all-in” when it seems like markets can only move higher. With investing, as with life in general, simplicity – and the discipline to maintain it – will lead to a happier outcome.

“Encountering sufferings will definitely contribute to the elevation of your spiritual practice, provided you are able to transform calamity and misfortune into the path.” – Dalai Lama

One of the most important teachings of Buddhist philosophy is that suffering is an inevitable part of life. This is not a pessimistic worldview, but a way to experience greater happiness. The idea is that one cannot understand happiness without the contrasting condition of suffering, so suffering is necessary to attain happiness.

And just as there is no happiness in life without suffering, there is no reward in investing without risk. As many of us know from experience, investing in risky assets offers many opportunities to suffer. Stock markets can be very stressful, and at times they can even seem cruel. But these difficult periods are precisely why investing in stocks tends to offer a higher return than bonds or cash.

“And just as there is no happiness in life without suffering, there is no reward in investing without risk.”

The higher expected return (happiness) of stocks exists because stocks have periods of negative returns (suffering); you cannot have one without the other. Once you accept this inevitability, you will be able to welcome market volatility and temporary losses as necessary aspects of the path to greater wealth, just as suffering is necessary on the journey to spiritual enlightenment.

“Choose to be optimistic; it feels better.” – Dalai Lama

The Dalai Lama may not be the person you envision when you think of the archetype of investment success. But if you approach your investments with some of his most basic recommendations, it is easy to see that he presents a compelling case. Do not be arrogant. Calm down. Understand that life is imperfect. These simple ideas will not make you wealthier by themselves, but combined with some ordinary optimism about the human condition, they will put you in a better position to let capitalism work in your favor. You may want to meditate on that.

Heritage Investment Group provides wealth management and investment guidance to high-net-worth individuals, families, charitable foundations, and qualified plans. We provide seasoned financial guidance backed by a disciplined investment process. For over 25 years, we have built our firm on a strong foundation of family and friendships with guiding principles of ethics and integrity.

The original version of this article was written by Heritage for the September/October 2022 edition of The Light, a local magazine serving Broward County, Florida.