Key Points:
- Investing is a long-term endeavor that requires discipline, time, and patience.
- A long journey begins with small steps. Regularly set aside a fixed amount for investment and add more when you have extra money.
- Maintain your investment commitment even when the market fluctuates; patience will yield greater results.
Want to seize investment opportunities more strategically?
Discipline
In a famous Greek fable by Aesop, a thirsty crow patiently drops one pebble after another into a jar of water until the water rises high enough for it to drink. The crow demonstrated three virtues essential for long-term investing: discipline, time, and patience.
Discipline in investing means consistently setting aside money and sticking to your investment plan, even when tempted to use the funds for other purposes. With the dollar-cost averaging (DCA) strategy, you can invest a fixed amount regularly, which helps spread out risk over time.
For example, you can start with monthly investments as low as Rp100,000 through the Regular Saving Plan (RSP) feature in the digibank app. This makes it easier to consistently set aside funds and grow your wealth.
Time
Just as the crow took time to fill the jar with pebbles, investing requires time to yield desired results. Start investing as early as possible and maintain those investments to benefit from compounding interest.
For instance, if you invest Rp1 million with a 10% annual growth rate, without compounding, your investment will be worth Rp1.4 million after 4 years. However, with the effect of compounding, your investment could reach Rp1.464 million in the same period.
If possible, add extra funds, such as year-end bonuses, to your investment portfolio. This helps accelerate the growth of your investments.
Patience
Patience is key when dealing with market fluctuations. Just like the crow that kept trying until it could drink, continue investing even when the market is down. If you’ve chosen companies with strong fundamentals, remain calm and patient.
For example, in 2019, if you invested in the IDX ESG Leaders Index or IDX SRI Kehati Index before the Covid-19 crisis and sold your investments during the market downturn, you would have missed the recovery that followed. Volatility is part of investing, but with the right mindset and appropriate risk tolerance, you can stay focused on your long-term goals.
With discipline, time, and patience, you can achieve better investment results. digibank by DBS is ready to support you every step of the way. Whenever you need, you can consult with a digibank Advisor who can guide you in building the right investment portfolio. Don’t hesitate to start your investment journey now!
