Periodic investment means automatically investing an amount of money at regular intervals. It is the ideal way for (beginner) investors to gradually accumulate a good amount of capital, as everything takes place automatically and without any emotional influence. This significantly reduces the risk of poor timing.
What is periodic investment?
All the benefits in brief
1. Reduced risk of poor timing
It is difficult to recognise the perfect time to invest, and even professional investors are seldom successful in this. Systematic investment significantly reduces the risk of poor timing.
2. Take advantage of price fluctuations
As a periodic investor, you can buy more shares with the same amount of money when the price falls. This allows you to accumulate your investment capital at below-average prices.
3. The power of capitalisation
The longer you can invest your savings for, the greater the beneficial effect of capitalisation. That means that a smaller amount invested at a younger age will achieve a better final result than a larger amount invested when you are older. In other words, the key message is to start young and invest your savings over a long period.
4. You set the pace yourself
Periodic investment is a flexible formula. That means you can choose the frequency yourself: every month, every quarter or every year.
5. Put your emotions to one side
Our emotions make it even more difficult to invest at exactly the right moment. Greed prompts people to buy shares when the stock markets are high, while fear keeps them away when prices are low. By investing periodically, you can prevent your emotions from influencing you over the stock market price.
How does periodic investment work?
Periodic investment is simple, and you don't need to follow the stock markets closely. All you need to do is:
- choose the amount you want to invest
- specify how often you want to invest it
- decide what investment fund(s) or class-23 investment-type insurance policy/policies you want to invest in
The KBC Investment Plan allows you to periodically invest in capitalisation shares in investment funds1. That means you can invest at your own pace without having to actively follow the stock market.
1 The term 'investment fund' refers to a sub-fund of a sicav or an open-ended investment company under Belgian or Luxembourg law, or a mutual fund.