Take Advantage of Ringgit-Cost Averaging

Wondering what is Ringgit-Cost Averaging ???

Ringgit-Cost Averaging is an investment strategy where the investor buys a fixed amount of investment on a regular basis such as monthly or quarterly. Buying shares on regular basis regardless of share price causes more shares are purchased  when price is low and fewer shares are purchased when price is high. This method is one of the best ways to ride out the ups and downs of the constant volatility of the stock market. 

" dollar (ringgit) cost averaging strategy to help to mitigate the negative effects of the market's volatility. " - Benjamin Graham

For the beginners, who do not usually have a big amount for lump sum investing and also lack of expertise and knowledge in the stock markets investment, ringgit-cost averaging will make a better choice.

How it works???

Let's illustrate how this strategy works. Assume you want to invest RM24000 every year.  Instead of investing the amount in a lump sum and bear the risk of entering when the market is high, you decided to invest RM2,000 into a unit trust fund each month. The price of unit and units purchased during the year are as shown :

Results :

• The average price of the unit for this one year is RM 0.2115. 
• The average cost of the units purchased is RM 0.2091.
• The investor purchased the units at the lower price of the average. 

Always bear in mind that this strategy applies for long term investment. Bear markets and bull markets can last for months or even years. For this strategy to be effective, continue investing through market downtrends and uptrend, and hold on to your investment over the mid to long term period ( 5 years and more ).

Get Started!

Interested in Ringgit Cost Averaging technique?? Here are what you should do to make this strategy works for you!

• Do not delay! Start as soon as possible! Start now!
• Sign up for automatic deduction on regular basis
• Discipline yourself to invest continuously

“Discipline is the key to success for the long-term investor. He or she must not fall into the trap of managing holdings by newspaper headlines, sound bites, mindless predictions, gut feelings or the last time period results.” – Frank Armstrong, author of “The Informed Investor.”

Tips to be a Successful Investor

Only attitude and the approach dealing with the uncertainty differentiate a successful investor from a failed one. Here are some tips to guide you on your investment.

1. THE INVESTMENT GOAL

First of all, understand the goal of your investment. Be clear on the purpose of your investment,  how long you wish to invest for, and the terms of the investment. Also, educate and empower yourself to undertand your investment products well.

2. ASSESS THE RISK

Risk assessment is the key part of any investment. Assess how much risk you are able and want to bear from the investment. Apply appropriate asset allocation to your risk profile. To reduce the risk, choose adequately diversified funds. Also, always be aware of the investment products which offer unreasonable returns. 

3. DIVERSIFY YOUR PORTFOLIO

A diversified portfolio approach always recommended especially for the beginners. Investing in different classes of assets would help to spread the risk. Unit trust fund is one of the best examples of diversified investment approach. Also, it's a good strategy to achieve short, medium or long term financial objectives. 

Start to plan your investment.
That's all for now. More to come soon..
See y'all very soon 😁