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.
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.”
