"In this world, which is so plainly the antechamber of another, there are no happy men. The true division of humanity is between those who live in light and those who live in darkness. Our aim must be to diminish the number of the latter and increase the number of the former. That is why we demand education and knowledge." -- Victor Hugo
As Victor Hugo so eloquently said above, education helps people live in the light. What does this have to do with investors? Well, plenty.
There are far too many people in the dark. Too many people put all their life savings and their trust in underperforming investments. Too many people don't even get that far, neglecting to save and perhaps even getting mired in credit card quicksand. Darkness -- lots of darkness.
Look in the shadows around your own life. Is that your sister living in financial darkness? Is that a black hole in your workmate's wallet? Is your neighbor taking "flyers" on hot stock tips and lottery tickets?
What's separating these folks from financial enlightenment? Is it... you? Are you enjoying the brightness all around you and at the same time casting a shadow on some people close to you? Step aside, then. Guide some loved ones to the light. Sit down with your sister and help plan her escape from credit card debt. Buy your neighbor a book on personal finance. Introduce your workmate to the www.better-investing.org and www.fool.com -- they're open 24 hours a day. Getting nudged in the direction of financial security might be the biggest favor these folks ever receive. Imagine the pleasure of seeing a light bulb go on over their heads!
Light plays an important role at this time of the year. And I'm not just talking about Christmas, with its Advent candles, Christmas trees and Main Streets festooned and sparkling. (Note, though, that the real Christmas story began with just one light, shining overhead.)
Just as Christians around the world are preparing for Christmas, the faithful of many other faiths are likewise gearing up for or recovering from their own holidays. Interestingly, in many of them, light is an important element. Perhaps because we're pretty much at the shortest days of the year, light is more precious to us now.
A review of some major religious (and cultural) holidays will, believe it or not, yield some investing lessons. Consider Hanukkah. It's the Jewish Festival of Lights, lasting eight days, with a candle being lit on the first night and additional candles added on successive nights. Hanukkah commemorates the rededication of the second temple in Jerusalem. Looking at a menorah with nine candles, one might imagine a healthy portfolio, shimmering with nine stocks. Smart investors should aim to hold between (roughly) eight and fifteen stocks. You'll need to understand and follow each one, so you shouldn't have more than you can handle. (Ever seen a birthday cake with scores of candles on it? Too many to control, too many to blow out... wax meltdown!)
Happening in October and November for Hindu believers is Diwali, one of the religion's biggest holidays, lasting five days. It's also called the Festival of Lights. One of the goddesses most feted at Diwali is Lakshmi. Of interest to investors, she's the goddess of wealth and prosperity (among other bounties, such as health, family and brains). Diwali observers attend to removing darkness from their homes and hearts: cleaning, opening windows, and setting right their frames of mind. Lights are also lit around the home, with rivers lit up at night by myriad candles floating down them.
Diwali might inspire us investors to regularly scrub our portfolios clean. If there are some hopeless turkey investments still sitting in your portfolio, consider getting rid of them. (Consider the tax implications first, though!) Once your portfolio is whittled down to the stocks you understand best and believe in most, it will take on a new glow of its own.
Occurring just after Christmas is Kwanzaa, celebrating African and African-American values and traditions. It lasts seven days, with each day dedicated to one of the following seven principles: Umoja (unity), Kujichagulia (self-determination), Ujima (collective work and responsibility), Ujamaa (cooperative economics), Nia (purpose), Kuumba (creativity) and Imani (faith). Not surprisingly, the holiday also includes the lighting of Kwanzaa candles.
The principles above relate well to investment clubs. What are they all about, after all, if not cooperative economics, purposeful research, unified decision-making, faith in corporate growth, and striving for financial self-determination?
Buddhists observe Bodhi Day in November or December, commemorating Buddha's enlightenment, which took place around 596 B.C. The light for this holiday is one of revelation, as the Buddha finally discovered the root of suffering: desire. There might be some investors out there who've circled on their calendars the date when they experienced their own financial enlightenment. Others may have noticed that the root of stock market suffering is often desire. It's greed that makes us think about risky undertakings, such as options, futures, and titanium mines in Upper Fredonia.
Ramadan, observed by Muslims in honor of Mohammed's revelations, falls at different times of the year from year to year (it recently ended this year). It lasts 30 days and involves fasting from sunrise through sunset (no mean feat for Muslims near the Arctic Circle when it falls in summer!). Light plays a part in this tradition, too. If I recall correctly from my expatriate childhood in a Muslim country, fasting ended when a designated person holding a hair from a black goat and a hair from a white goat could no longer tell them apart and began again when he could. (Cannons were traditionally fired, to let people know when the moment occurred.) Many Muslims believe that by fasting, they not only worship God, but also gain insight into what it's like to be poor and hungry, thus fueling charitable giving.
Finally, we return to Christmas. To Christians, the holiday commemorates a big gift from God. Thanks partly to American ingenuity and capitalism, we've transformed the holiday into one of massive giving to each other. (It's funny when you think about it. God offers forgiveness and grace. We offer fruitcakes, fluffy slippers, and "Frosty the Snowman.")
When you admire the lights of the season this year, think about how you can spread some financial light to others around you. Scrub down your portfolio so that your holdings can shine more brightly. Light a candle for self-determination. And...
You can also share a little light with those who need it by contributing to Foolanthropy. As usual, this year we're collecting for five very worthy charities.
Selena Maranjian is an investor writing for other investors, and come to think of it, so are all of The Motley Fool's writers.