THE PRINCIPLE OF DOLLAR COST AVERAGING

The Principle of Dollar-Cost Averaging is a disciplined regular investment method that may be applied to maximise the effect in unit trust investment. It is a simple and prudent investment technique that an investor may invest a regular (monthly) fixed sum with a selected unit trust fund over a period of time. By investing a fixed sum of money regularly, the investor does not have to worry about market timing, share prices or interest rates. His regular investment amount will get fewer units when the unit price is high, but more units when the unit price is low. Over a period of time, the investor will accumulate the units at their lowest average price.