MINDFUL INVESTING AND WEALTH MANAGEMENT
Mindfulness is growing in popularity as people see, and feel, the benefits to their health and emotional well-being. It has also entered the business environment as we realise the real benefits of a focused mind, ie being fully aware and actively attending to our workplace, to what we are doing, to the space we are living in, and having our mental capabilities fully available at any given moment.
Modern lifestyles leave us fatigued and stressed, as a result, we do not commit our minds fully to our circumstances. We are often only half-present in a situation and make distracted decisions.
The importance of mindfulness for investing and wealth management.
“If you are suddenly confronted with a problem, do you want to have 50% of your mental capacity to solve that problem or the full 100%? Similarly, if you are going to manage clients’ money and successfully invest for the future, do you want to make and execute those plans in a cloud of mental distraction and emotional turmoil?” asks Grant Alexander, Director of Private Client Holdings, a full-spectrum wealth management company that has incorporated mindfulness into the culture of the organisation and is using it to underpin the company ethos of “nurturing wealth”.
“Mindfulness facilitates calm and focus. This mindset supports better investment, financial, and life decisions.”
Some of the benefits of mindfulness:
Less rumination. Research shows that mindfulness can reduce ruminating thoughts, which in turn can help you think more clearly and positively.
Reduced stress. People who practice mindfulness show fewer signs of stress. This makes meditation even more important for those in prominent and decision-making roles, such as Wealth Managers.
Improved memory. Working memory also seems to increase, helping you retain more information.
Better focus. Mindfulness helps you focus on your work, consistently throughout the day, reducing chances of getting distracted, and sharpening cognitive potential.
Greater emotional control. People who practice mindfulness have greater control over their emotions and are less likely to react impulsively. This aids in making more logical investment decisions.
According to Alexander, aspects of mindfulness that are most relevant to making better financial decisions include:
Direct experience (Focused engagement)
Rationality – “Mindfulness is about thinking clearly and being cognisant/aware of what you are thinking about. As a result, we can make rational decisions as opposed to emotional decisions. Rational decisions are truly the only way to implement successful investment strategies.”
Direct Experience (focused engagement) – “Direct experience or direct knowledge are the best ways to decide what is true and false,” says Alexander. “From an investing perspective, an extreme interpretation of this concept would be to invest by trial and error to have “direct knowledge” of good investing principles. However, for our purposes, direct knowledge includes focused engagement with the results of investments.”
Patience – “Patience is a core principle of mindfulness, and patience is also a key quality of effective long-term investing. Patience gives us greater capacity to avoid poorly conceived or hasty financial decisions.”
Humility – Alexander advises that a humble attitude allows us to recognize our own competencies and limitations - supporting a more objective perspective. “Humility provides a sound viewpoint from which to identify potentially damaging decisions.”
Better decisions and behavioural finance
“Focusing on one decision at a time, and avoiding panic, or frustrated and negative decision making is essential for nurturing wealth,” says Alexander. “It may sound like a bit of an “out there” concept but in terms of decision-making, the evidence is mounting to show that mindfulness has a powerful, positive impact on the process, leading to better decisions. This once esoteric idea is now becoming more mainstream, and Private Client Holdings’ decision to introduce mindfulness practices puts us in the company of corporations worldwide such as Apple, Google, Nike, General Mills, Proctor & Gamble and more, and the trend is only expected to continue.”
About Private Client Holdings
Private Client Holdings was founded as a corporate tax consultancy in Cape Town, South Africa in 1990. Since then the company has developed into a full spectrum Asset and Wealth Management Company and Multi-Family Office with six specialist divisions; Wealth Management, Portfolio Management, Financial Services, Fiduciary Services, Cash Management and Risk Management.
Private Client Holdings (PCH) are taking the lead in Southern Africa when it comes to providing high net worth families with an all-inclusive wealth management solution and recently secured 2nd position overall in the TOP WEALTH MANAGER: BOUTIQUES in the INTELLIDEX TOP PRIVATE BANKS & WEALTH MANAGERS AWARDS 2019. They also placed 3rd in the Passive Lump-sum Investor award and 2nd in the Successful Entrepreneur award. The award they are most proud of is placing 2nd in the People’s Choice Award - an award based purely on feedback from a confidential client survey.
Private Client Portfolios, the Portfolio Management arm of Private Client Holdings has been awarded the title of “Best Investment Advisory Team – South Africa 2019” in the Capital Finance International Award – this London based CFI.co awards programme identifies individuals and organisations worldwide that truly add value through best practice within their industry.
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Private Client Holdings has taken care to ensure that all the information provided herein is true and accurate. Private Client Holdings will therefore not be held responsible for any inaccuracies in the information herein. The above press release does not constitute advice and the reader should contact the author for any related concerns. Private Client Holdings shall not be responsible and disclaims all loss, liability or expense of any nature whatsoever which may be attributable (directly, indirectly or consequentially) to the use of the information provided.