管氏企业

When you have a regular investment plan, you do not have to worry about timing your investment in financial markets because you can take advantage of a concept known as Dollar Cost Averaging. This strategy means that you are investing regularly over a long period of time, smoothing out
fluctuations in the investment market.

Through Dollar Cost Averaging, the amount you invested is always the same. This means you end up buying more units when the price is low and fewer units when the price is high. The aim is to average your entry point to smooth out your investment risk over the long term.

However, this strategy does not guarantee profit or protect against losses in declining markets. Such a strategy also involves continuous investment toward your plan, regardless of fluctuating prices. Therefore, you should consider your financial ability to continue purchase of units through periods of market downturn.

Let’s look at a hypothetical example of what happen if you had invested RM100 a month over a 12 month period in a fluctuating market.

Over twelve months you would have invested RM1200.00 into your investment account. You would have received a total of 2362.35 units. The average cost of your units is RM 0.51 (RM1200.00/2362.35 units). By continuing to invest the same amount every month even though the market is changing, you reduced the average cost of your total investment.