The Spiritual Gold

Divergence

There are many reasons for the divergence between what happens to Gold in India and worldwide. Gold is always a buy in India compared to the world, no wonder the state considers it a problem, puts restrictions on imports and is concerned how to address this obsession. If there is something at the top of the consumption list, it’s gold. Having grown up in India I somehow can relate a bit more. Nicknames too came from gold. Sonu or Sonia just might be the most popular nick names in India, meaning, coming from gold.

Spiritual Investing and Risk

The question I am deliberating here is a bit different. With Shariah investing pretty popular now and Shariah indices available across the world, we have already connected societal virtues with investing. Materialism and spiritualism for believers can be pretty inseparable. So are elements of spiritual investing key in defining and understanding risk? Are these elements specific to an asset like Gold? Does spiritual investing alter the basic investment principles?

Spirituality and other Investing Principles

Sharia is the Muslim or Islamic law which regulates many aspects of a Muslim’s life including the type of investments allowed. Interests are considered usury. Bonds are prohibited. Non Sharia-compliant companies include casinos, alcohol and tobacco companies. Behavioural Finance also talks about virtuous investing, how to save for tomorrow, how to overcome biases and overcome risk aversion, etc. There is a lot of focus on ethics and governance. But Indian spirituality and its influence on investing is a lot different. This should be no shock as both investing and spirituality are about psychology or somewhere about beating the mind which is considered a prelude to beating the market. And because Gold has been historically associated with wisdom, value and trust, it’s a very strong psychological anchor. Hence spiritual thought should explain the respective divergence in investing behaviour when it comes to gold.

Spirituality, Holding Period and Risk Transfer

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Mukul Pal, is a Chartered Market Technician, MBA Finance and a member of the reputed Market Technicians Association (MTA). He has more than a decade of Capital Market experience dealing with derivatives and global assets. He has worked for Bombay Stock  Exchange, multinational Banks and brokerage houses in leading research positions before starting on his own in 2005. He is the President of the MTA Central and Eastern European Chapter.


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