When you finally reach your investment goals and harvest your hard-earned money, you’ll realise the years of effort were ultimately worth it. Picture for representation puirposes only.often have unrealistic expectations of how much investing gains really contribute to their overall wealth. Those who expect high and consistently positive returns are often disappointed: the reality is that returns rely on many variables and that volatility is ever-present.
That means your capital contribution of RM1.28 million is 64% of the total investment amount. The shorter the investment horizon, the larger your capital contribution is as a percentage of the total amount. That realisation, while seemingly obvious, makes it clear that your own capital contributions are more important than the investment gains realised at the end.
If you had actually managed to invest RM10,000 into one such rubber glove company before the rally, and sold at the peak with perfect timing, to make an amazing 15x multiple, your total investment would have grown to RM150,000 within a matter of months. Investors face a much higher chance of success if they commit to contributing a significant amount of capital over a long period of time towards safer, diversified investments. While putting RM10,000 on a risky bet is exciting, the effort of contributing monthly towards a large goal is more rewarding in the long run.