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If asked the question "What were you doing 23 years ago?" many people would do the maths and find themselves back in 1987 ? the 80s era.

So naturally thoughts go to the heyday of 80s musical hits and dubious fashion and hairstyle trends, the appearance of the infuriating Rubic?s Cube, the Back to the Future movie trilogy and other iconic things from this time. Or one might consider some of the significant political and cultural changes that took place in the 80s ? such as the height of apartheid South Africa, the end of communism and the fall of the Berlin Wall.

However, from an investment perspective, what did you do 23 years ago?

According to Paul Cluer, MD of Foord Unit Trusts, if someone had invested R20 000 in the Foord Umbrella Provident Fund 23 years ago, today that investment would be worth over R6-million. During this time, the fund?s unit price appreciated from a starting value of R1 per unit to just over R300 per unit in 2010. That is a return of approximately 30 000 percent (this is not a typo ? it?s a return of thirty-thousand percent!)

Taking into consideration that R20 000 was worth much more 23 years ago than it is today (equivalent perhaps to the cost of a small vehicle today), this is still an outstanding return. And for the last six years the Foord Umbrella Provident Fund has been invested in the Foord Balanced Fund unit trust ? a vehicle any investor can access with a lump sum from R20 000.

"Perhaps you were working a holiday job between terms at university, earning great tax free cash wages or perhaps you celebrated your Bar Mitzvah, 18th or 21st birthday with a monetary gift or even received an inheritance in 1987? "The point is what did you do with this money and, if you saved it, has it worked hard enough for you?" asks Cluer.

Twenty years ago, Carolyn Bywater, an employee at Foord Asset Management invested contributions of R8545 into the Foord Umbrella Provident Fund. By the time she left Foord to start a family, those contributions had grown to R18 145 and today that investment is now valued at R1.329-million; without any additional contributions in the past 20 years. Her contributions grew by an average of 27.9 percent per year over this period.

Cluer advises that an important aspect to keep in mind is that one must remain invested, just as Carolyn has done. They must be resolute in avoiding temptation to withdraw in a panic when markets are down. Trying to time market cycles can be very dangerous ? even if you call the top of the market you have to then call the bottom of the market or potentially miss out on the recovery. Making one correct call is very difficult; making two in succession is almost impossible.

"For most people 23 years seems like forever, especially when contemplating the future. But for many of us, with hindsight, 23 years ago seems like yesterday. This is due to the asymmetrical nature of time; it stretches forever, but passes quicker than we realise. If you missed out on investing 23 years ago, it is never too late to start. In another 23 years from now, we will all look back and think how quickly time flies. It would be nice to appreciate the passage of time while measuring the compounded growth of your investments."

Editor's note

These examples don't prove that an investment at Foord, in particular, is the why these investments did so well. All it proves is that compound interest, when giving enough time, works like magic when it comes to returns.