The Basics of Investments
Dollar Cost Averaging
 Trying to figure out if you're investing at the right time is one of the
hardest tasks around. For this reason, some investors turn to a strategy
that can lower the overall cost of funds and stocks that they invest in.
By investing set amounts over a period of time, you can lessen the
impact of buying investments when they are at their highest prices. If
you invest a set amount on a regular basis, you will buy more shares
when prices are low and fewer when they are high. This means that over
time the average cost of your shares will be less than if you made
sporadic lump sum investments -- unless of course you have been blessed
with perfect timing.
Dollar-cost averaging doesn't mean that you can't lose money, or that
you can't make more if you invest large amounts at the beginning of a
market rise. But dollar-cost averaging can help you keep a long-term
perspective and avoid the common mistake of buying high and selling low
on market moves.
Investment plans do not necessarily ensure a profit, nor do they protect
against loss in a falling market. You should consider your ability to
invest during periods of fluctuating price levels. As with all
investments, you will lose money if you end your plan when the market
value of all your shares is less than their original cost.
We have analysed in depth some of the most popular funds, where our clients
are invested. Click here
to view the data.
Next: Rebalancing your investments
|
