With the spread of the Coronavirus casting a dark cloud over the world, the knock-on effects of the global pandemic are continuing to impact markets. But, if you are able to look beyond the many 'get rich quick' schemes, the key to financial security although it might not sound exciting is to remove the emotion, invest regularly and get rich slowly!
Taking away the emotion of investing - Understanding Cost Averaging
In simple terms, the key point about cost averaging is to invest on a regular basis. In a fluctuating volatile market, cost averaging can allow you to benefit from buying more investment units when prices are lower.
The graph below shows the advantages of saving a regular fixed sum in a volatile market over the short to medium term. This comparison shows the value of two-unit holdings over a 10-year investment term.
At first glance, Situation ‘A’ appears to provide better fund performance over Situation ‘B’.
However, on closer inspection the benefits of unit price fluctuation become clear. Dowload the free guide to find out more.
By investing a consistent amount at regular intervals, you can gradually ‘drip-feed’ into the market regardless of the price on any given day.