From Daoist Philosophy to Financial Practice: Wu Wei and Passive Investing in Indian Equity Markets

Abstract

The research paper explores how the concept of Wu Wei that is a fundamental aspect of the Daoist philosophy can be used in influencing investor behavior in the context of passive investing in the Indian equity markets. The study is qualitative in nature that primary information is gathered using retail investors to examine the linkage between the non interventionist attitudes and the investment strategies. The results indicate that there is a strong positive association between Wu Wei orientation and passive investment methods like index investing and passive portfolio holding. The statistical analysis of the results proved that investors who act in accordance with Wu Wei values have fewer behavioral biases, such as overtrading and making irrational decisions. The paper reveals how philosophical theories can be applied in the analysis of financial behaviour, especially within culturally plural markets, such as India. It also concludes that Wu Wei can be used to provide a useful perspective to advocating disciplined, stable and efficient investment policies to add to the behavioral finance literature as well as the practice of investment policy decision-making