Sports has been in the limelight in recent months. By taking cues from elite athletes in their training programmes, investors could consider adopting a perseverant and consistent approach when they map out their long-term investing strategy1.
A Hong Kong fencing medalist was reported2 to have said that being a champion is not just a dream, but one has to work hard and not give up. This could be likened to keeping your financial goals in-check, investing regularly and staying invested. [Read more: 5 FAQs on long-term investing: starting out and 5 FAQs on long-term investing: staying invested]
Perseverance and consistency
Investors, based on their investment objectives and risk appetite, could focus on regular monthly investing1 like athletes would for their day-to-day trainings as they prepare for their competitions. Athletes generally train regularly over the long term, and not just aggressively over a short period.
Athletes could also face ups and downs in their athletic careers. Likewise for investing, where markets can always have a bad day, week, month or even year. Market volatility is normal, and investing can involve significant drawdowns from time to time. Investors should be aware of the volatility they can handle based on their objectives and risk appetite, but troubled times aren’t a sign to sell everything.
THE ROLE OF LONG-TERM INVESTING1
Leveraging dollar-cost averaging
Investing a fixed amount of money regularly can help reduce the impact of short-term market volatility on the overall investment in the long run.
Harnessing the power of compounding
A key reason to start early and stay invested is that this can help benefit from the compounding effect over a long period of time.
Based on their investment objectives and risk appetite, investors could consider monthly fund investment plans1 as they build their capital. J.P. Morgan Asset Management’s eTrading requires a minimum investment of HK$1,000 per month3 and investors will be able to enjoy the online trading services and keep track of their investments via the eTrading website.
J.P. MORGAN MONTHLY FUND INVESTMENT
Minimum monthly investment is as low as HK$1,000 – making it easy for you to start a habit of investing!
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Considering your investment risk appetite
Fencers, basketball players and rugby players have specific needs for strength and agility, and the training would vary according to their requirements, a Hong Kong fencing champion’s strength trainer was reported to have said4. Similarly, the same could be applied to investing as investors strive to achieve their long-term financial goals, based on their risk appetite.
On J.P. Morgan's eTrading platform, the Portfolio Risk Rating is shown in the 'My Portfolio'3. The rating, from lowest risk level to highest risk level, includes conservative, stable, balanced, growth and aggressive. Similarly, each fund also has its own risk rating range from 1 (being the lowest) to 5 (being the highest) which will contribute to your portfolio risk rating. You can regularly review your portfolio risk and rebalance the portfolio as needed.
Taking a cue from elite athletes as they train towards achieving their goals, investors could consider investing regularly as they strive to achieve their financial objectives.