In a letter to his brother, John Keats, the British poet wrote, “At once it struck me, what quality went to form a Man of Achievement … Negative Capability.”

What is Negative Capability?

According to Keats, negative capability is “when a man is capable of being in uncertainties, mysteries, doubts, without any irritable reaching after fact and reason.”

Negative capability can be a suitable alternative to typical reactions. It refers to two distinct sets of skills: 

‘Not doing’, as against ‘Doing’ 

Most of us are either working or feel obliged to do something productive. It can be running errands, going to the gym, or comparing our social media lives with those of others. Therefore, despite the rising awareness of work-life balance and mental well-being, we are busier and more stressed than ever.

‘Not doing’ is not to do anything apparently useful. For example, relishing the moment or focusing on our senses.

Cultivate alternative reactions to stress and unexpected situations

Negative capability is the capacity to be able to operate in uncertainty and ambiguity. It is the ability to stay with the discomfort and anxiety of doubt and not being in the know. While we always attempt to react or respond to circumstances, negative capability is the capacity to not react or resist the urge to solve what is non-solvable in the current conditions.

Applying negative capability to personal finance

When we apply negative capability to personal finance, it would mean to

• Not be stressed on the short-term volatility in market conditions. The best way to deal with volatile markets is to remain calm and avoid knee-jerk reactions. This is based on the fact that you have a well-diversified portfolio and a sound investment strategy.
• Not look and analyze the markets every day. It means to tune out the noise and stay put by investing in the right assets. It can result in better investment success. It is not necessary to be active in the markets if everyone else is buying or selling. Instead, it is better to do the homework and have a good reason, time frame, and price or return targets for buying and selling investments.

For example, if you had invested in a Nifty index fund ETF in 2013 and let it stay as-is, you would have earned 13.3% compounded annualized returns as of May 2023. And, if you had invested in it in 2003, the compounded annualized returns would have been 17.2%*

• Refrain from trying to earn more at the cost of a decreased quality of life. Money is essential and makes life easier. While it may allow you to buy more stuff, it may not be meaningful in the long run. We can have a more wholesome life by investing time, effort, and money in developing meaningful relationships, ensuring good health, giving back to the community, etc.

Awareness of market trends, socio-political scenarios, and personal finance situations is vital. However, acquiring and developing negative capability is equally important so that we avoid taking rushed actions or making premature decisions that can harm our financial portfolio.

Source: * https://www.financialexpress.com/money/how-rs-100000-in-indian-equities-gold-real-estate-and-us-stocks-has-grown-in-20-years-3126741/