Dear Friends,

John Bogle, the founder of the famous Vanguard financial company and the creator of the revolutionary theory of 'Index Fund' argued that knowledge alone is not enough for investment success, but discipline is more important and that matters the most.!

Mental control is the first thing to make a profit in the stock market. He believed that it is better to act as an ordinary person who understands the market trend rather than investing as a genius.

The most important psychological lesson that Jack Bogle presented in investing is "Don't Look". He warned that if we start an investment and look at it frequently, we will make wrong decisions. A person who checks the value of his investment daily is more likely to be nervous about small declines in the market and sell his shares in a hurry. But a person who looks at his portfolio only once a year will remain calm because he is unaware of the temporary declines that have occurred in between.

For example, during the Covid 19 pandemic, many people sold their stocks at a loss, fearing that the world was going to end. But those who were patient and stayed in the market made huge profits. Similarly, rushing to sell stocks in tense situations like the current Iran war can have the same negative effect.

One of the most shocking facts in the history of investment is the study of the ‘Magellan Fund’. From the year 1977 to 1990, this fund was managed by the great expert Peter Lynch. During those 13 years, the fund made an incredible profit of 29% per year on an average.

However, Fidelity found that the average investor who invested in that fund lost money instead of making a profit. The main reason for this was the lack of discipline on the part of the investors front. 

Their habit was to buy high when the fund was rising and sell low when it was falling. This is the biggest proof that even if the world's best money manager is working for you, if you don't have patience, you will fail.

The results of a 20-year study published by the company 'DALBAR', which studies investor behavior, further confirm this. While the US stock market (S&P 500) has returned an average of 10% per year over the past 20 years, ordinary investors have only earned a profit of 6%.

This 4% difference is called the 'Behavioral Gap'. This loss was caused by unnecessary efforts such as trying to predict the "right time" (Market Timing) and changing stocks frequently. If they had quietly invested in an index fund and waited, they would have received the full profit that the market brought.

The only truth that all these studies tell us is that people who lose money in the stock market are not often the ones who lose money because of bad stocks; Instead, they fall because of their own bad decisions.

You don't have to be a genius to succeed in investing.

All it takes is consistent investment and unwavering patience.