THR has arrived! Hooray Hooray Horray!
THR has arrived! What Have Used Your THR for? Have you received your Tunjangan Hari Raya (THR) from your workplace? Or you might be those who are still waiting to receive your THR by the end of this week? For you who have received THR, have you used your THR in accordance to the tips that we have provided in the previous article? Forgot or did not have chance to read? Don’t worry, you could find it here. So, which method have you chosen to use your THR? In this article, we will be discussing about using the THR you received to invest. But still remember, prior to investing you THR perhaps it is better for you to pay off your bills or debt and prepare for emergency fund first. So, why allocate THR for investment?
As you have known, the performance of Indonesia capital market was negative together with the negative performance of market globally. JCI reached this year’s lowest level at 3,937 on 24 March 2020, which means negative performance of 37% if compared to the beginning of the year level. However, JCI performance has improved by 18% since that day and now JCI level is at 4,639 (data per 11 May 2020). Try imagining if you actually invested at that time, you could have gained 18% from your investment. However, please keep in mind that investing is for the long term and we could never guess the lowest level of the market. Therefore, it is better to invest regularly regardless of market condition so you could take advantage of all market situation. But, why is now a good time to invest and it is good to invest the THR you received? Although you could invest at any time as all time is a good time to invest, there is one factor that makes now is an even better time to invest. What is it?
Discount! If you compare JCI level now against the level in the beginning of the year, JCI level is still discounted by 26% where JCI level in the beginning of the year was at 6,299 and per 11 May 2020 JCI has dropped to 4,639. Similar to shopping, you definitely want to take advantage of being able to purchase same good quality stuff with discounted price, right? Likewise with investing, you could make use of this moment to subscribe Mutual Fund with same quality but with a discounted price. Isn’t it attractive? In addition, JCI level will generally increase in longer horizon regardless of the volatility in the middle of the way. For example, JCI level in the last 10 and 20 years were 2,812 (11 May 2010) and 529 (11 May 2000). Try comparing with current level. Although it is true there is market volatility where the level goes up and down, overall if it is compared in the long term JCI level still increased. Perhaps, you could see it clearer by looking at the below chart.
Note: The graph below is for illustration only. Past performance does not reflect future performance.
What are you waiting for, Moduers? Let’s invest when the price is discounted! And do you know that there are new wealthy individuals who are born during crisis? Curious? Stay tuned for the next article!