Everything I Need to Know About Investing I Learned in Yoga (Part II) - The Kleshas

Most of our worst financial decisions don’t come from a lack of information.

They come from misperception.

In yoga philosophy, the kleshas are the mental afflictions that distort how we see reality. In behavioral finance, we use different language — biases, emotional triggers, cognitive errors — but the underlying obstacles are strikingly similar.

Both traditions suggest the same thing: before we fix markets, we have to understand the mind.

The Five Kleshas — and Their Financial Parallels

In both yoga and investing, awareness is the first discipline.

Avidya (Misperception)

Avidya is misunderstanding reality — seeing things not as they are, but as we assume them to be.

In investing, this often shows up as recency bias: believing that what just happened will continue indefinitely. After a strong market year, we expect more gains. After a downturn, we expect more losses.

Confirmation bias reinforces this. We seek information that supports what we already believe and ignore what challenges it.

Avidya doesn’t mean ignorance in the casual sense. It’s deeper than that. It’s mistaking temporary volatility for permanent truth.

Asmita (Ego)

Asmita is identification with the ego — the belief that our identity is tied to being right.

In markets, this can appear as overconfidence. We believe we can outsmart the system, time entries perfectly, or pick the one stock that others have missed.

Ego-driven investing often leads to excessive trading, concentration risk, or holding onto losing positions because selling would feel like admitting failure.

When identity becomes entangled with performance, objectivity disappears.

Raga (Attachment)

Raga is attachment — clinging to what once brought pleasure or success.

In investing, this might look like holding onto a once-profitable stock long after it no longer aligns with your goals. It may be anchoring to the price you paid, unwilling to reassess based on current reality.

Attachment narrows vision.

Just as yoga asks us to release physical and emotional gripping, investing asks us to release outdated assumptions.

Dvesha (Aversion)

Dvesha is aversion — avoiding discomfort at all costs.

Financially, this often appears after painful losses. Someone who experienced a market downturn may avoid investing altogether, holding excessive cash for years.

It can also show up as herd behavior — following the crowd to avoid standing apart, even when the crowd is buying at euphoric highs or selling in panic.

Avoiding discomfort doesn’t eliminate risk. It often creates a different kind.

Abhinivesha (Fear of Loss)

Abhinivesha is often translated as fear of death, but more broadly it is fear of loss — fear of change, fear of uncertainty.

In financial terms, this aligns closely with loss aversion: the tendency to feel losses more intensely than gains.

This fear can cause paralysis. We cling to familiarity, resist necessary adjustments, or avoid new opportunities because uncertainty feels threatening.

But investing, like practice, requires moving forward despite uncertainty.

The Role of Structure

Yoga doesn’t eliminate the kleshas by wishing them away. It offers structure — breath, discipline, repetition — to recognize and gradually reduce their influence.

Investing is no different.

A thoughtful financial plan provides:

• Clarity during volatility
• A framework for decision-making
• Guardrails against impulsive reactions
• Flexibility to adapt as life changes

The plan is not about prediction. It’s about orientation.

Practice, Not Perfection

In yoga, progress comes through steady practice.

In investing, steadiness matters more than brilliance.

Awareness of these mental patterns doesn’t eliminate them. But recognizing them allows us to pause before reacting — to respond instead of reflexively moving.

The work isn’t predicting markets.

It’s understanding ourselves within them.

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