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A sage was sitting under a tree when a man insulted him. As there was no reaction from the sage, the man again insulted him but still there was no reaction. This went on for a few hours and the man got tired and asked the sage, “I have been insulting you, yet you didn’t get angry?” The sage replied, “I haven’t accepted your insult.” The man was confused, “But you heard every word.” The sage replied, “I don’t need your insult. Then why will I hear it. It remains with you.” The man replied, “How would it remain with me?” The sage said, “If you give someone coins and that person doesn’t accept those coins, then with whom will those coins remain?” The man said, “They would remain with me.” The sage said, “The same happens with insult. Since I haven’t accepted it from you, the insult would remain with you. So, I have no reason to be angry.” The man apologised.

 In his book ‘Psychology of Money’, Morgan Housel says that “Investing is not the study of finance. It’s the study of how people behave with money.” Those who have created wealth from investing would understand this well. While the market goes through bull and bear cycles, investors go through emotional cycles of greed and fear besides following a herd behaviour. They buy when the majority are buying and sell when the majority is selling. The real challenge is when the markets turn volatile and fear rises. It is as if investors feel ‘insulted’ by volatility and decide to leave. In hindsight, whether it is the ‘insult’ of 2008 or of 2020, we should not ‘accept’ it and continue to invest for the long run. Real wealth creators are not those who are good at picking stocks or funds but those who can control their emotions and stay invested for a few decades.