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Dollar Cost Averaging - The power of an ASP

So you've finally decided to dive into the world of mutual funds. Congratulations!

Are you concerned about the ups and downs of the markets? Unsure of when to invest? An Automatic Savings Program offers you a solution.

Rather than trying to time the markets, a strategy recommended by many is called "dollar cost averaging". It's a simple strategy that helps you save by averaging out the cost of your mutual fund units. It helps you escape the guessing game of when to buy low and sell high.

How does Dollar Cost Averaging work?

Dollar Cost Averaging is investing the same amount of money on a regular basis (weekly, bi-weekly or monthly) Since mutual fund prices fluctuate, you will buy more units when markets are low; and you will buy fewer when markets are high.

With Dollar Cost Averaging, you can often lower the average cost of your investments. While this strategy does not guarantee a profit or protect against a loss, it usually results in a lower average unit cost over time.

Why do it?

No guessing when to buy

When it's time to invest, you do so regularly, regardless of what is going on in the market.

Avoids the temptation to time the market.

Some investors cannot resist the urge to try to invest at a market low and take their profits at a market high. They usually fail because the task is virtually impossible, even for the experts.

Do not have to invest large amounts.

You can invest any amount you like regularly and automatically to ensure that you attend to your long-term goals. Plus, you're much more likely to stick with your plan until you reach your goal.

Does it really work?

Dollar cost averaging can lower your average price and increase the number of units you can purchase. Since mutual fund prices fluctuate , you will buy more units when markets are low, and fewer units when markets are high. That lowers the average cost of your investments. As a result, despite the market volatility the investment in the example gained $92.87*. This example just goes to show that market volatility has its uses.

Here's an example for if you started investing regularly:

But if you only did a lump sum investment:

*This table is used only to illustrate the possible effects of regular investments in a mutual fund and is not intended to reflect future values of The Streetwise Fund or returns on investment in The Streetwise Fund.

An Automatic Savings Program (ASP) lets you automatically transfer a preset amount of money from your bank account into The Streetwise Fund at regular intervals. You determine how much you want to invest, and how often. Once you start your ASP, it continues to make investments automatically, so you don't have to worry about it. You work toward your goals step by step, consistently over time while taking advantage of the effects of dollar cost averaging. It's quick and easy and you can do it when you open your account. Don't worry if you're not ready. After you open your account you can start an ASP online or by calling us.

Start an Automatic Savings Program today!

Remember, you can set up automatic transfers every payday, or for whatever period suits you – weekly, bi-weekly or monthly.

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