From Market Volatility to Life Clarity: What Vipassana Taught Me About Risk
Imagine if a particular stock in your portfolio suddenly crashes by 15%, what are your first few reactions? It would probably be one of despondency – “Oh my god, I have lost so much money”. It would then move to one of anger – at the company concerned or other traders, or about any other random event or organization – “the company management is messing it up” or “someone is shorting the stock” or “the government rules are so messed up”. It might even turn to self-deprecation, “I am just not good enough as compared to X, Y, or Z”.
Now step back and look at the responses. You realise that all the responses are essentially focused on factors that are outside of you. Even the self-deprecation is your way of justifying the material loss. It’s an autopilot thought. The rational side of you always knew of the risks inherent in stock markets, but once the risk surfaces and consequences happen, the mind becomes a vortex of thoughts, emotions, feelings, and all reactions emanating from these are and always will be driven not by facts but by how you run away from the fact.
As rational beings, we evaluate risks based on Sharpe ratios, mathematical modelling, and standard deviation – a quantitative prism that defines causes and consequences in purely measurable terms. However, as human beings, risk is nothing but how you feel, and it has come from our deep-rooted fear and the need for survival instincts. Fear of failure, anxiety of the unknown, and the resultant emotional rollercoaster that you end up in when the event unfolds.
Looking within
But what if the wisdom to navigate market risk didn’t just come from complex algorithms or economic forecasts, but from profound practices of self-awareness and personal transformation? This is where I found Vipassana meditation a game-changer. The idea is not to control the mind, but to seek clarity about the narrative, delayering the narrative by sifting the noise from the signal, separating story from truth, and responding (not reacting) to volatility, be it the markets or life. Just observe and accept – No love, No hatred. Just Observe being in the present – observe your thoughts and feelings – Just be present. No emotions, and then think about what needs to be done based on checklists.
Vipassana, an ancient Indian meditation technique, means “to see things as they really are.” It involves observing one’s own bodily sensations and mental phenomena with equanimity, without reaction or judgment. The core teaching revolves around three universal truths: impermanence (Anicca), suffering (Dukkha), and non-self (Anatta). Putting it in perspective, the rumor tariff that has roiled the markets is not going to be forever. While it has created some stocks getting hammered, it could well be an opportunity to discover the roughs and perhaps buy lower. It helped me understand that stock picking is not an ego-trip- there are no stocks I can be emotionally attached to. The primary objective is to stick to the basics – buy low, sell high, stay the course, and correct the course when required. Anatta, on the other hand, helped me deal with the constant churn that we see around us and correct myself in the face of the change, which is letting go of the ego that prevents us from accepting the fact that we could be wrong.
Calm in the Storm
Vipassana trains the mind to observe these sensations (the tightening in the stomach, the racing heart) without being overwhelmed by them. It teaches us to see the market fluctuation for what it is: a data point, not a personal attack or judgment of my abilities. This detachment allows for more rational decision-making, preventing impulsive actions driven by fear or greed. Love or Hate, Vipassana helps me to observe the market dip, acknowledge the internal sensation of fear, but choose to stick to my pre-defined strategy rather than selling in a panic. In practical terms, Vipassana helps me detach from outcome bias when performing my actions.
Another extremely powerful lesson from Vipassana for volatile markets is the principle of impermanence. Every peak will eventually dip, and every trough has the potential for recovery. When a market is soaring, the Vipassana practitioner in me remembers its transient nature, guarding against overconfidence. When it’s crashing, I recall that this too shall pass, fostering resilience and patience. This understanding reduces anxiety related to short-term gains or losses, shifting focus to long-term vision and strategy. It’s about understanding that market conditions, like all phenomena, are in a constant state of flux.
Vipassanā teaches that the world is a singular, interconnected web of constantly shifting energy, and that we should observe this flux without attaching significance to it as “good” or “bad.” The core practice is to accept things exactly as they are—and as they are not—by cultivating the power of observation. This allows us to remain centered and avoid being emotionally impacted, which in turn prevents us from making irrational, reactive decisions. True freedom is found in this state of detached acceptance, where the only constant is change itself.
Expanding on this, the understanding that the world is one helps us see others as an extension of ourselves. This perspective fosters a deep sense of empathy, replacing feelings of hatred or doubt with compassion and care. By recognizing that their behavior stems from their experiences of life – that’s the way they were made or they were shaped while growing up, we can respond with understanding and acceptability, choosing to act from a place of compassion, rather than disapproval.
This is not abstract philosophy, but a hard lesson in the hardboiled world of financial turbulence. Every crash has a lift, and every lift will eventually lead to a trough; that is the nature of the market. Market players who understand this are better placed to ride through turmoil without knee-jerk reactions and deliver an alpha that is healthy and, more importantly, sustainable. Vipassana provides the awareness to observe reality as it is, fostering equanimity and reducing reactive emotional responses to external events.
