Chapter 1 DCA Investment will Turn Profit Even at Half Price

Chapter 1 DCA Investment will Turn Profit Even at Half Price


1. Buy cheap, highly sellââÅ¡¬


Everybody thinks with common sense that the investment is like ââÅ¡¬ÃƒÆ’…buy cheap, highly sellââÅ¡¬, right? Actually by the influence of this common sense about investment, many people can be seen says that ââÅ¡¬ÃƒÆ’‹Å“Investment is game to buy the cheapest priceââÅ¡¬ÃƒÆ’¢Ã…¾¢ and ââÅ¡¬ÃƒÆ’‹Å“The most important thing in investment is timingââÅ¡¬ÃƒÆ’¢Ã…¾¢. And then, it starts from this ââÅ¡¬ÃƒÆ’‹Å“Price gameââÅ¡¬ÃƒÆ’¢Ã…¾¢, then we can know that there are so many people that have imagination such as ââÅ¡¬ÃƒÆ’‹Å“investment is a gamblingââÅ¡¬ÃƒÆ’¢Ã…¾¢.


What a pity if the people think ââÅ¡¬ÃƒÆ’‹Å“Investment is a gambleââÅ¡¬ÃƒÆ’¢Ã…¾¢, although they need to think about the ââÅ¡¬ÃƒÆ’‹Å“moneyââÅ¡¬ÃƒÆ’¢Ã…¾¢



figure1: even at half price


2. Even half price we still can get profit


See the graphic (Graphic 1) above. This shows the fluctuation of the financial product within 10 years. For example, we choose mutual funds A.


We start at this product with Rp. 10,000. 7 years later, the price down until Rp. 2000, and after that it reverses. After more than 10 years it becomes Rp. 5,000. It becomes half price after 10 years.


In this mutual funds, if we invest within 10 years, the funds might be half price. How if we ââÅ¡¬ÃƒÆ’‹Å“continue invest with fixed amount every monthââÅ¡¬ÃƒÆ’¢Ã…¾¢ within 10 years? If we invest every month, we will invest 12 times. If we invest within 10 years, it becomes 120 times. If we invest steadily within 120 times, it will become a deficit?


The answer is ââÅ¡¬ÃƒÆ’…ProfitââÅ¡¬.


Even the amount becomes half price from we started, if we invest every month, it may result the profit.


The people that thinks about investment such as ââÅ¡¬ÃƒÆ’‹Å“buy cheap, highly sellââÅ¡¬ÃƒÆ’¢Ã…¾¢ may be surprise, in fact when we start to use financial instrument, even the amount when we started becomes half price, the profit will be resulted. It displays on image 2.


In DCA investment, the result of financial instrument and the achievement of investment is different. If you invest every month, it is a mistake if you think ââÅ¡¬ÃƒÆ’…buy cheap, highly sellingââÅ¡¬ then you only see the timing of buying and selling.


In other hands, do not worry about the way of thinking such as ââÅ¡¬ÃƒÆ’‹Å“Investment depends on the timing of startââÅ¡¬ÃƒÆ’¢Ã…¾¢. I think that the people that want to buy investment in cheap price, they will be confused about ââÅ¡¬ÃƒÆ’‹Å“the time to buyââÅ¡¬ÃƒÆ’¢Ã…¾¢. However, if we can invest every month, we do not need to be confused.

figure 3: when should I start?


3. Never worry about timing


Check the following quiz. It displays at image 3 about the fluctuation of mutual funds. If you do DCA investment within 10 years, if you start from which time of A/B/C/D/E, which result will be the best?


However, the result is C. If we make it row according to the profit, the row will be C/D/B/E/A. Do you know the reason why the result of D is better than C, E is better than B?

The summary is, we have to think that DCA investment is ââÅ¡¬ÃƒÆ’‹Å“buy cheap, highly sellââÅ¡¬ÃƒÆ’¢Ã…¾¢ and we do not need to think about the start timing.


When the ââÅ¡¬ÃƒÆ’‹Å“DCA investmentââÅ¡¬ÃƒÆ’¢Ã…¾¢ is piling up little by little every month, the result of the product that invested, and the achievement of investment is different. It is like the investment nowadays, if we only view only the result of the product, we will misread to the achievement of investment. ââÅ¡¬ÃƒÆ’‹Å“DCA investmentââÅ¡¬ÃƒÆ’¢Ã…¾¢ is different with ââÅ¡¬ÃƒÆ’‹Å“buy cheap, highly sellââÅ¡¬ÃƒÆ’¢Ã…¾¢, the world of investment is getting bigger.


Figure AAAA : Present Amount Of Money ââÅ¡¬“ Future money

Figure 5 Present Amount of Money-Future Money

So the explanation about ââÅ¡¬ÃƒÆ’‹Å“DCA invesmentââÅ¡¬ÃƒÆ’¢Ã…¾¢ is, it is not saving money or ââÅ¡¬ÃƒÆ’‹Å“present moneyââÅ¡¬ÃƒÆ’¢Ã…¾¢, but it is a technic of investment in order to generate ââÅ¡¬ÃƒÆ’‹Å“the future moneyââÅ¡¬ÃƒÆ’¢Ã…¾¢ from the salary or income from real estate. The investment of ââÅ¡¬ÃƒÆ’‹Å“the future moneyââÅ¡¬ÃƒÆ’¢Ã…¾¢ is different with the investment that we have done until now, the result of investment product and the achievement of investment is not match, so it did explain about the characteristic. So that is why, I would like to explain simply and easy to understand about the investment of ââÅ¡¬ÃƒÆ’‹Å“the future moneyââÅ¡¬ÃƒÆ’¢Ã…¾¢ which everyone can work on that is not explained by anyone. By this, you will change the image about the investment.



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