When it comes to investing, Being disciplined is important. A disciplined and consistent investor can truly accumulate wealth over the long term.

Ways to stay disciplined in investment

Because investing is not a smooth ride, it is quite challenging to actually execute the investment plan.Changes happens continuously in the market, in people’s financial situation, goals, income etc.  which makes this ride more hard. Most of the time, investors get anxious with such volatility and they start to redeem from their investments/funds or switch, in order to avoid losses. However, if one really want to find success with investing, he/she must remain disciplined.

Here are few ways to remain disciplined in investment:

1. Start early and with small investments
2. Learn parallely with investments.
3. Do not stop investing if you suffer any loss or get discouraged if you did any mistakes. Your loss and mistakes are often best guides.
4. Control your emotions and do not make investing decisions on the basis of emotions.
5. Understand and learn about market cycles.
6. Keep long term view.
7. Neglect short term losses.
8. Diversify your portfolio.
9. Patience is the key/

Why discipline is important in investing?

Let’s try to understand why discipline is important and how it benefits the investors. Following few points will make clear that how investing in a good investment avenue like equity or mutual funds, in a disciplined way  for long term help someone  to achieve his financial goals or accumulate wealth:

• To get compounding returns– When one invests for long term in options like mutual funds, they can earn compounding kind of returns. Therefore, it’s important to stay regular and not interrupt your investments unnecessarily.
• To take benefit of market cycle– Market volatility is quite a normal thing and comes guaranteed with equity investments. Therefore, when one invests for long term and stays regular in their investments, they can take benefit of market cycles and earn decent returns.
• Helps investments to grow- Investing regularly and wisely allows it to grow and give positive returns.
• Minimize the risk- If one is investing in a disciplined manner for long term it automatically help investors to avoid or minimize the risk.
• No need to time the market:-Being Disciplined means regular saving and investing, which makes the concept of ‘time the market’ totally irrelevant and enables to take advantage of market opportunities.
• Disciplined investing helps you to stay aligned to your financial goals.

Now, let’s understand this with an example:

Savita started her investment of Rs. 25,000 through SIP in a good equity diversified mutual fund. She invested money for 20 years long duration with the average expected rate of return of 15% (inflation adjusted). The money would get compounded over the years and she would be able to accumulate almost Rs. 1.7 crores by the end of her investment period.

Following is the simple presentation of above assumed information. (source: SIP calculator.in), you can take help of online SIP calculators for such calculations:-

Make sure to stay regular and disciplined in your investment.

Note:- Above article based on one of my Quora Answer.