Short-Term - Long-Term Investment

Investment is investment; the concepts of small and large are just that, they don't hold any technical meaning beyond defining the scale. Beyond the commonly advised patience and regular savings, I will draw attention to two concepts when investing. The first is perseverance, and the second is discipline. However, if there is an even more important concept, it is the purpose for which the investment is made, which is a topic for a completely different article.

Patience and Regular Savings Habit in Long-Term Investment

The fundamental analysis, profitability, and dividend payments of the company whose stock you will buy will bring long-term investments to the forefront. However, short-term small investors who buy and sell stocks in our stock market often become long-term investors in stocks they entered for the short term without doing this analysis. They start to examine the concepts we mentioned after incurring losses. Don't ask how I know (I know from my own past experiences). Generally, the system of following fundamental analysis in the long run, buying, forgetting, and checking occasionally works.

Perseverance and Discipline in Short-Term Investment

Due to the many variables in long-term investment, its return cannot be known by anyone. However, we know that if we stick to the formula FV = PV * (1 + i)^n, it is inevitable that very small savings will become very large. This formula is known in banking as the compound interest formula, but its actual name is compound return. In this equation, FV = Future value with returns in future periods, PV = Value of the money you have today, i = Periodical return in percentage, and n represents the number of periods. If we apply this equation to real life; let's assume there are no transactions in the stock market for 2 weeks due to holidays and festivals, and consider an average of 50 weeks. You have only 100 TL as principal, and let's assume you earn 3% every week. In the relevant equation, your 100 liras will become 438 TL if FV = 100 * (1 + 0.03)^50, 1,921 TL in the 2nd year, 161,922 TL in the 5th year, and 262,000,000 TL at the end of the 10th year. Of course, this example is exaggerated and impossible in a world where profit and loss are siblings. However, the most important point here is one of the extreme examples of where discipline and perseverance in investment can take your savings. Remember, there is no small or large investment. There is disciplined and undisciplined investment.