Jack Bogle Find What Works for You

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Wellington fund was founded in the year 1928 who invest with the balanced portfolio of common and preferred stocks and high‐grade bonds, with the objective of providing investors with stability, income, and a little low‐risk growth to keep pace with inflation. During the year 1966, the company has made an acquisition of the Ivest fund. Ivest fund invests more to the common stocks which invite more fluctuations whereas Wellington fund minimizes fluctuations. Wellington fund was one of the few funds who has survived during a great depression of the year 1929.

After the acquisition of Ivest, Wellington’s equity average increased from 55% to 80% and fast turnover also get started.

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Their new strategy does not suit them and their fund fall by 55% compared to 31% of fall by the S&P 500. After that, they started a new strategy based on technical analysis. It’s shocking that Mr. Bogle who has formed an index-based strategy and fund into the leadership of him use technical analysis based fund. They lost 40% during the year 1972 and which recovered during the year 1983, after the 11 long years. Their strong offense proven wrong for the defense. And they lost reputation also.

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We need to identify the method which is comfortable for us. If we adopt the method which is not comfortable for us then we have to face difficulties. If we adopt the method of others then those borrowed method does not provide us a conviction and create a problem with our investment. Additionally, if we have an investment methodology but we go out of that methodology then it will also affect our wealth.

There is more than one method for creating wealth but if any method of creating wealth is not suitable with our temperament then we should avoid it rather stick with it. Every person is different in risk-taking capability, emotional characteristics, and the different purpose of making an investment so that if one method is suitable to a particular person then it might be possible that the same method is not suitable to the other one. No method is right or wrong but what suits us is right for us.

Read for more detail: Big Mistakes: The Best Investors and Their Worst Investments by Michael Batnick