My 30 Year Investment Journey in 1 Chart and 5 Keywords

Sometimes one chart tells a better story than many pages of numbers.

The chart above shows my quarterly dividend and interest income since I started investing almost 30 years ago. The blue bars represent the income received in each quarter, while the red area represents the cumulative amount collected over the years.

When I first started, the numbers were very small. A few hundred dollars of dividend income in a year did not look significant. There were also many years when progress seemed painfully slow. Yet, as time passed, the effect became more obvious. The quarterly income gradually increased, and the cumulative income curve became steeper.

Looking at this chart today, I do not really see money.

I see time.

I see mistakes made during different market cycles. I see the Asian Financial Crisis, the dot com bubble, the Global Financial Crisis, the European debt crisis, the China slowdown, COVID, wars, Geopolitical tensions, inflation, interest rate shocks and many other periods when investors were worried about what might happen next.

More importantly, I see the benefit of simply staying invested.

If I had to summarize almost 30 years of investing into just five keywords, they would be Patience, Compounding, Reversion to Mean, Margin of Safety and Behavioral Finance.

Among these five, I believe the last one is probably the most important.

Patience

Investing is one of those activities where doing more does not necessarily produce better results. Sometimes doing nothing is actually the right decision.

When I started investing, I naturally wanted results quickly. Most investors probably feel the same way. We buy a stock and hope that the price will move up. When nothing happens for six months or one year, we start wondering whether we have made a mistake.

After going through many market cycles, my thinking has changed. I am much less concerned about whether a stock performs well next month or next quarter. What matters more is whether the underlying business continues to generate cash flow, maintain a healthy balance sheet and pay sustainable dividends.

Good businesses need time to create value.

The same applies to a portfolio.

If you look at the first part of my dividend chart, there is nothing particularly impressive. The quarterly income was small and the cumulative amount hardly moved.

But that is exactly how long term investing often looks in the beginning. The early years are slow because the capital base is still small. Even a good return on a small amount of capital remains a small amount of money.

The important thing is to keep going.

Patience does not mean blindly holding everything forever. If the business deteriorates permanently or the original investment thesis is wrong, there is nothing wrong with selling. Patience means giving a sound investment enough time to work.

There is a difference.

Compounding

Compounding is probably the easiest investment concept to understand and one of the hardest to experience.

Everyone knows the formula.

Money earns returns. Those returns are reinvested. The larger amount then earns more returns.

Simple.

But experiencing compounding requires something that cannot be compressed into a spreadsheet.

Time.

My dividend chart illustrates this quite clearly. During the early years, the cumulative dividend line increased very slowly. Later, the slope became noticeably steeper. It was not because I suddenly discovered some magical investment strategy. The capital base had simply become larger.

Dividends received from existing investments could be reinvested into more income producing assets. Those investments produced additional dividends, which became additional capital for future investment. The process repeated itself year after year.

This is why I have always paid close attention to cash flow and dividends.

Compounding is often described as earning returns on your previous returns, but I prefer to think of it as a snowball rolling down a long hill.

At the beginning, the snowball is small. You keep adding savings and reinvesting dividends, yet the progress does not seem very exciting. This is probably the stage where many investors become impatient. But as the capital base grows, every turn adds more to the snowball. A $5,000 dividend reinvested today may generate another $250 next year, which itself can be reinvested again.

After 20 or 30 years, something interesting happens. The portfolio starts doing more of the heavy lifting than your own savings.

That is when compounding becomes really visible. The snowball gets bigger not because it rolls faster every year, but because there is increasingly more capital working for you.

For Uncle, this snowball effect has become more obvious over the past 10 years. Even after retiring and no longer having an active income, my dividend income and net worth have continued to grow. This is partly because I reinvest a portion of the dividends I receive, allowing the money to continue compounding, and partly because many of the companies I own have increased their dividends over the years. Higher dividends give me more cash to reinvest, which in turn generates even more future income. This is how the snowball keeps getting bigger, even without fresh money coming in from employment.

The hardest part is simply giving it enough time.

I do not view dividends simply as money to spend. I see dividends as capital returned to me for reallocation. That distinction is important. A dollar of dividend received today gives me another dollar of capital that I can decide how to deploy. Sometimes the best decision is to reinvest it into the same company. Sometimes another company has become more attractive.

Sometimes the market is expensive and keeping some cash is perfectly acceptable.

Compounding therefore does not mean automatically reinvesting every dividend into the company that paid it. To me, compounding is about continuously reallocating capital toward opportunities where the expected return looks attractive relative to the risk.

Over decades, those decisions accumulate. Just like dividends.

Reversion to Mean

Markets have a habit of moving from one extreme to another. When a sector is popular, investors can find a hundred reasons why prices should continue rising.

When the same sector becomes unpopular, suddenly nobody wants to touch it. I have seen this many times.

Banks have been considered uninvestable during financial crises. Oil companies have been declared obsolete. Property stocks have gone from market favourites to forgotten counters. Technology companies have moved from extremely expensive to deeply unpopular and sometimes back again.

This is where the idea of reversion to mean becomes useful. Nothing grows at an extraordinary rate forever.

At the same time, many fundamentally sound businesses do not remain depressed forever either. Profit margins normalize. Interest rates change. Commodity prices cycle. Consumer sentiment recovers. Capital eventually moves from expensive assets toward cheaper assets. This does not mean every falling stock will recover.

Some companies genuinely deteriorate and never return to their previous profitability.

The important question is whether the problem is cyclical or structural.

If it is structural, a cheap stock can become even cheaper. If it is cyclical and the balance sheet is strong enough to survive the difficult period, patience can sometimes be rewarded. This is one reason I am comfortable looking at unpopular sectors.

I do not need everyone to agree with me today. I need the business to survive, continue producing cash flow and eventually return toward a more normal level of profitability.

Margin of Safety

Benjamin Graham's idea of margin of safety remains one of the most useful concepts I have learned in investing.

We can analyse companies using financial statements, discounted cash flow models, earnings forecasts and valuation multiples, but there will always be things we cannot predict.

That is why the price we pay matters.

If I estimate that a company is worth $1 and pay $1 for it, there is very little room for error. If my assumptions turn out to be slightly wrong, my expected return can disappear quickly. But if I can buy the same business substantially below what I believe is a reasonable estimate of intrinsic value, I have some protection against mistakes.

That discount is my margin of safety.

For me, margin of safety is not only about valuation. The balance sheet is also part of it. A company with manageable debt, strong operating cash flow and sufficient liquidity has more room to survive difficult economic conditions. Dividend coverage matters as well. A high dividend yield means very little if the company needs to borrow money to maintain the payout.

As an income investor, I would rather own a company paying a sustainable dividend supported by genuine cash flow than chase an unusually high yield that may disappear next year. Over 30 years, avoiding permanent losses becomes increasingly important.

You do not need every investment to become a multi-bagger. Sometimes simply avoiding the big mistakes is enough to produce a satisfactory long term result.

Behavioral Finance

This brings me to what I consider the most important keyword of all. Behavioral finance.

Investing looks like a numbers game, but in reality much of it is a psychological game. The spreadsheet is rarely frightened. The investor is.

When the market falls 30 percent, the mathematical calculation may tell us that expected future returns have improved.

Emotion tells us something very different.

It tells us to sell. When share prices rise every day and everyone around us seems to be making easy money, valuation tells us to be careful.

Emotion tells us that we are missing out.

This conflict never disappears completely, regardless of how long we have been investing. Experience does not remove fear and greed. It simply helps us recognize them earlier.

Over the years, I have become increasingly convinced that investment temperament matters more than investment intelligence.

You can have an excellent understanding of accounting, economics and valuation, but if you panic during every bear market, the knowledge may not help very much.

Similarly, you can build the most sophisticated valuation model in the world, but if you keep increasing your assumptions simply because the share price keeps rising, the model becomes a tool for justifying your emotions.

Markets constantly test our behaviour.

Fear makes us sell good assets cheaply.

Greed makes us pay too much.

Overconfidence makes us concentrate too heavily.

Recency bias makes us assume that whatever happened during the last few years will continue indefinitely.

Confirmation bias makes us search for information that supports what we already believe.

Knowing these biases does not make us immune to them.

But knowing that they exist helps.

For me, the objective is not to remove emotion from investing. That is probably impossible. The objective is to avoid allowing emotion to control the capital allocation decision.

Dividends Are My Capital Allocation Tool

One important part of my investment approach is how I think about dividends. As a shareholder, I am also a capital allocator.

When a company earns $100, management has several choices. It can reinvest the money into the business, acquire another company, repay debt, buy back shares or distribute some of the cash to shareholders. Each option can create value if done properly.

But each option can also destroy value.

Share buybacks are a good example.

Buying back shares below intrinsic value can be very beneficial to remaining shareholders. Buying back heavily overvalued shares can destroy shareholder value.

The same applies to reinvestment.

Retaining all earnings sounds sensible if management can generate attractive returns on incremental capital. But retaining cash simply for the sake of expanding the company does not necessarily make shareholders richer.

This is one reason I like receiving dividends.

Once the dividend reaches my account, the capital allocation decision comes back to me. I can reinvest it into the same company if the valuation remains attractive. I can buy another company with better prospects. I can move the money into another sector. I can keep it as cash and wait. Or, particularly at this stage of life, I can use part of that income for living expenses without having to sell shares.

That flexibility has become increasingly valuable to me.

I sometimes think of buying a new dividend stock as buying another small cash flow generating business. The stock ticker is secondary. What I am really buying is a claim on future cash flows. When those cash flows eventually return to me as dividends, I get another opportunity to decide where that capital should go next.

That process has been repeated many times throughout the 30 years shown in this chart.

The Chart Also Shows the Difficult Years

It would be easy to look at the rising cumulative line and imagine that the journey was smooth.

It wasn't.

Quarterly dividends moved up and down.

Some companies reduced their dividends.

Some investments disappointed me.

Some stocks were sold too early.

Others were held too long.

There were periods when the portfolio value dropped substantially even though the businesses continued operating normally. There were also long stretches when markets seemed to go nowhere. As mentioned earlier,the journal is not smooth or just straight line, we gone through Asian Financial Crisis, the dot com bubble, the Global Financial Crisis, the European debt crisis, the China slowdown, COVID, wars, Geopolitical tensions, inflation, interest rate shocks and many other crisis or tough periods

But this is precisely why I prefer looking at the long term dividend chart.

Share prices tell me what somebody is willing to pay for my portfolio today.

Dividend income tells me something different. It tells me how much cash my collection of businesses is sending back to me.

The blue bars are certainly not smooth, but over a long enough period the direction becomes quite clear. And behind those blue bars sits the red cumulative line. Every dividend received becomes part of my investment history. Some of it was spent. Much of it was reinvested.

The reinvested portion purchased additional cash flow generating assets, which produced future dividends.

That is compounding in the real world. Not perfectly smooth. Not every quarter higher than the previous quarter. But gradually moving forward.

Final Thought

After almost 30 years of investing, I do not think successful investing requires discovering the next great stock every year.

It requires something much more ordinary.

You need patience to allow good businesses and your capital to grow. You need compounding and, more importantly, enough time for compounding to become meaningful. You need to understand reversion to mean because markets, industries, margins and valuations rarely move in one direction forever. You need a margin of safety because our forecasts will inevitably be wrong sometimes.

And above everything else, you need to understand your own behaviour.

The market will always give us reasons to feel excited or frightened. There will always be another crisis, another hot sector, another prediction about where interest rates are heading and another stock that everybody suddenly believes they must own.

Thirty years from now, most of those headlines will have been forgotten. What remains will be the decisions we made with our capital. When I look at this chart, therefore, I do not see a perfect investment record. Far from it. I see thousands of individual decisions accumulated over three decades. Some were good. Some were poor.

Many were probably just average.

But patience allowed time to work. Compounding allowed small amounts to become meaningful.

Reversion to mean created opportunities. Margin of safety helped reduce the damage when I was wrong. Behavioral discipline helped me stay in the game when markets became uncomfortable.

Perhaps that is the biggest lesson from the whole chart.

You don't have to be right all the time. You need to stay rational enough, patient enough and financially strong enough to keep investing for a very long time.

And then, slowly, the chart starts to tell its own story.

" Rome wasn't built in a day "

" Sedikit sedikit lama-lama jadi bukit "

Till next update.

Cheers! 😊

STE

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