Before I let you in on little secrets of mine about successful investing, I would like to say at the outset that investing is an act of faith , a willingness to postpone present consumption and save for the future. And as we all know the future is full of uncertainties. The same principle also applies to investing; there are no such things as a “sure bet”. When we buy stocks and bonds, we are professing our faith in the long-term success of the economy and financial markets. When we invest in a mutual fund, we are expressing our faith that the professional fund managers will look after the asset we entrust to them. We are also recognizing the value of diversification by spreading our investments over a large number of stocks and bonds. A diversified portfolio of a mutual fund minimizes the risk inherent in owning a single stock. To be a successful investor one must be willing to take a calculated risk on uncertainties. For without risk there is no return.

This may be easier said than done, especially when so many of us have lost total faith in the Stock Exchange of Thailand (SET). During the height of economic bubble in 1997, the SET index peaked out at 1,700 points and at the current level of 368 points, one can only guess how long it would take for the index to return to its former peak again. Several investors that bought into equity mutual funds, either knowingly or unknowingly, have also lost more than 70% of their original investment. Admittedly, the recent loss or should I say “set back” has dealt a major blow to our self confidence, faith in the financial markets and our pockets! But this is precisely the time when we must stick our long term plans and investing for the long term is central to the achievement of optimal returns by investors.

Although, most investors have yet to embrace the idea of long-term investing, but it is surprisingly easy to achieve. To put it simply, investing is like planting a tree. The process may take several years for shoots to develop and blossom before one can enjoy the fruits of one's labour. In addition, growth has its season. Yes even in a tropical country like Thailand ! There are winter, summer and rainy seasons. As long as the roots are not severed, all is well and all will be well. If one looks carefully, nature and economic cycles are very similar. The inevitable seasons of nature will bring good times and bad times, inflation and deflation, wars and peace, epidemic flues and famine. Despite the changing seasons, the Thai economy has survived and even rebounded from the blackest calamities such as the 1997 Baht crisis. So here are a few simple rules to rely on in order to make your investments survive and prosper in the long run:

• Time is your friend. Invest early and invest often. Begin to invest in your 20s, even if it's only a small amount and never stop. Even modest investments in tough times will help you sustain the pace and will become a good habit to get into. Compound interest and Dollar Cost Averaging technique will add further boost to your long term performance.

The amazing effects of compound interest.

	Somchai	Somsri	Difference
Start investing at age	18 Years	30 Years	13 Years
Initial investment amount	1,000 Baht/Year	2,000 Baht/Year	100%
Investment Period	(18-30 Years) 13 Years	(30-65 Years) 36 Years	3 Times
Principal amount	13,000 Baht	72,000 Baht	454 %
Investment amount at age 65	690,000 Baht	598,000 Baht	92,000 Baht
Return on investment *	5,207%	731%	4,476%